Having a roof over one’s head is one of the dreams of every fine gentleman, single or married. It’s also the dream of everyone, so I don’t sound like I’m taking sides with the gentlemen. However, there are prerequisites for getting these homes on loan if you’re not overly buoyant financially. The eligibility criteria vary from lender to lender and each applying for a home loan is scanned or weighed through his or her past and present debt profile which brings us to the subheading
Credit Report
What is Credit Report?
Statistics have shown that over half of the Australian populace lives in total oblivion of what a credit report is. This is why it often comes as a shocker when they shop around for loans.
A credit report is a financial data made available to lenders behind your back (Since many are ignorant) by creditors like your financial institutions. These data contain all your financial endeavors related to bill payments, loans obtained in the past, credit card records et al. This information tells the lender of the home loan if you’re eligible to be granted a loan.
The Credit Report always has a Credit Score at the end, which is the overall rating of your financial track records with payments. If your credit score is meager, you have a Bad Credit Home Loan profile. This means you’ve always been late at your bills, or you’ve not been righteous in the past by clearing up your pile load of debts. So all your ugly debt profile slams you up in the face at the instance when you think you’re going to be a homeowner soon and your offer is declined. Basically, with a Low Credit Score, your chances at getting home are limping at a low 20%. So now you have a Bad Credit Home Loan what do you do?
How to get away with a Bad Credit Home Loan
Unlike murder, this is a lot simpler and might need to you to mend your terrible ways and imbibe a new culture of keeping a clean sheet or put it this way, a debt-free profile. It might take a while, but in the end, you get the home, at least that’s what you want.
Since your lender has rejected your offer owing to a low credit score, you can adopt these three strategies to up your game and get the loan.
- Don’t go to the next shop
There’s always this impulsive move in the form of “well, I got bounced; let me try the next lender.” No, avoid that move; you’d probably get bounced again which will further aggravate issues by denting your credit score the more.
- Opt for a non-digital lender
Most lenders use a computer to check your credit score, and once the system says it is low, no questions asked, no platform to defend yourself, your application is out rightly rejected. So seek out for these non-digital lenders who can even chat with you on your credit score and your chances at a home loan are fatter here.
- Proof that you’ve changed
Your Bad Credit Home Loan will not get better if you continue with the bad payment habits. Start paying your bills on time, clear all your debts, maintain a clean loan record and you can come back for a warm embrace by the lenders.
Home Loans for the self employed
For those who are not in any payroll, there’s a home loan reserved for them. It’s called the Low Documentation Home Loan (Low Doc Home Loan)
Homeloanexperts.com says the Low Doc Home loan is a type of home loan that can be approved without the normal income verification requirements.
This means, the self-employed are not being screened based on recent tax returns or the traditional financial statements that the income earners present. They are rather scored by a few less stringent parameters like income declaration, two years tax returns, recent financial statements and accountant’s verification letter.
Suffice to add that lenders are more strict with the lending policies on these loans for those who aren’t on a payroll because they see classify home loans for self-employed as high risk ventures.
