Bad credit mortgages are designed to help specific home loan borrowers, but many Australians may not know if they’re part of this demographic or not.
While it pays to talk to a loan specialist to explore your options and determine which mortgage is best suited to your needs, there are certain financial circumstances that will generally make a potential borrower a good candidate for a bad credit home loan.
If you’ve failed to pay a bill in a timely manner in the past, you may have gone into default. All defaults are bad for a borrower’s credit, but they can differ based on the amount owed, whether it is paid and how long it took to pay.
A judgement occurs when a court rules that you must pay a debt. If a creditor is forced to take you to court in order to recover the money you owe them, it will affect your chances at borrowing money in the future.
When a person is unable to repay their outstanding debts, they may claim bankruptcy. Many borrowers try to avoid this at all costs, as it could result in the loss of other assets, as well as severe damage to their credit score. If you’ve undergone a bankruptcy, chances are bad credit home loans are more suitable to your needs than traditional mortgages.
There are various other factors that could indicate whether a bad credit mortgage is the right decision for you. However, in general, if you’ve had financial difficulties in the past that might lead lenders to turn down your application, including defaults, judgements or bankruptcies, a bad credit home loan could be the solution.
Contact the specialists at Redrock to find out more about bad credit home loans.