Maybe you made some financial mistakes a few years back, but have been working on repairing your credit since. While on that path, you may find yourself looking to buy a home, confident you’re on your way up in your career and ready to leap into homeownership. As a potential homebuyer, a mortgage broker can offer you options including a bad credit mortgage to help you qualify for a home loan. You may even be able to qualify for a mortgage if you’ve filed for bankruptcy in the past.
The homebuying process can be confusing, overwhelming and stressful. Finding out how large of a loan you qualify for, as well as what that loan-to-value (LTV) ratio will be when applying for a loan, is crucial to evaluating what you can afford and how to plan for the future. Here’s what you need to know.
The LTV ratio
Every potential homebuyer should hunt around for the right lender, and that’s even more important for those with bad credit. Some lenders offer up to 95 per cent LTV to those with bad credit, giving you a ratio similar to those who have strong credit.
You may also be able to refinance a current home up to 90 per cent, which can be a great option for those looking to explore mortgage options without having to move.
What you can do
If you’re looking to buy a home with bad credit, start by finding the right lender. Some lenders will offer 85 per cent LTV, while others offer up to 95 per cent LTV. There’s a wide array of lenders with different rates, so be sure to shop around.
Once you’ve found a reputable lender that offers an LTV you’re comfortable with, gather together all of your relevant documents that prove the ways you’ve been working to repair your credit. This may include proof of increased income, steady employment history and other efforts you’ve made to improve your financial situation.
Speak with a specialist lending manager who can provide you with a personalised finance offer to help you on your way to buying a home. Look for a lender and specialist who brings a personal touch to the lending process. You’re more than just your credit score, and if you’re on your way to improving your credit and making efforts to show lenders you’ve put changes in place, lenders may recognise those efforts and show you the way forward to homeownership.
Talk to one of our specialist lending managers today for a personalised finance offer.