A staggering 25 per cent of Australians believe their bad credit score would stop them getting approved for a loan, according to a Finder survey of 2,033 people. This number is so high thanks to a number of myths about getting a home loan with bad credit, making it seem more difficult than it is.
To clear the air, and put your mind at ease, we’ve busted three of the most commonly believed myths.
1. Myth: I can’t get a home loan if I have bad credit.
Busted: Redrock Mortgage Brokers specialise in securing home loans for people with bad credit. We have an innovative range of products for people who may not fit the criteria of traditional lenders policies.
This means that we may be able to help you with finance regardless of your credit report – even if it includes defaults, judgments, bankruptcy, or company administration. You may require a bigger deposit but otherwise, generally speaking, your bad credit home loan will function just like a regular loan.
2. Myth: The nature, size or age of defaults on my credit report doesn’t matter.
Busted: Many people believe that lenders tar all defaults with the same brush, but that’s just not the case. If your defaults are smaller or from several years ago, for example, lenders will look upon you more favourably than if you have large and recent blemishes on your credit report.
For that reason if you had a small blip in the past before turning yourself around, securing a bad credit home loan should be a relatively straightforward process with the right expert assistance.
3. Myth: With a bad credit home loan I’ll be stuck with a high interest rate for life.
Busted: This is untrue for two reasons. One being that many bad credit loans have interest rates that are similar or identical to regular finance products. The second is that a bad credit loan can be a short term solution.
If you pay off your bad credit loan on time, and the blemishes on your credit report expire you can always refinance to a regular loan with a lower interest rate.
Get in touch with the expert team here at Redrock if you need help securing a bad credit home loan. We’ll offer support and advice from application through to settlement, making sure your loan is perfectly suited to your unique situation.