Have you just started a new job? Been late on a few repayments and have a bad credit rating? Are you self-employed? While there are many factors lenders consider when signing you up for a home loan, these are a few reasons many Australians struggle to get into the home owners market.
It’s not all bad news though, if you have ended up with a little black mark next to your credit history or recently started a new job, you do have the option of applying for a bad credit loan, otherwise known as a non-conforming loan, or low doc loan.
What is a non-conforming loan?
Non-conforming loans are set up to assist borrowers who don’t meet the standard lending criteria. This could be due to;
- Missing payments
- Starting a new business
- Having a tax debt
- No job stability
- New Australian resident with no credit history
- Nearing retirement
Your ability to apply and repay a non-conforming loan will be calculated based on your income and borrowing record.
The downside of bad credit
While a non-conforming loan might secure you your dream home it could also come with a few extra grievances that include, requiring a larger deposit and higher interests rates than standard home loans.
If you’d like to cast an eye over your credit rating you can request a free copy of your personal credit report from Australian credit reporting agencies, such as Veda.
It’s not all doom and gloom, just a challenge on the road to the Australian dream. There is only one way to find some of the best home loan options available for your specific circumstances – shop around!