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Acquiring a home loan is a possibility today even for people with bad or blemished credit scores. Though a few lending institutions prefer to work only with people with established credit, there are several institutions willing to lend to people with bad credit.
For more info, Call Us: 1300 740 485
The first question asked by the lender when approached for a home loan is about the credit score. A credit score of less than 620 often finds problems in acquiring a bad credit home loan. A loan might still be given, but the interest charged may be higher. The worse the credit, the higher the interest charged on the loan. Making a down payment reduces the monthly payments in interest. However, missing a payment or paying less than the due payments will lead to a serious balloon payment at the end of the term.
One way of getting a bad credit loan is to go in for a home equity loan. Lenders check three main areas before processing the loan - capacity (whether the borrower will be able to keep up the payments), credit (what is the borrower's credit score) and collateral (what is the value of the loan). An equity loan takes care of the third factor. The lender may hold rights to the deeds of the home property until the loan is paid off. This reduces the risk to the lender.
For more info, Call Us: 1300 740 485
People having histories of bankruptcies or delinquencies behind them are considered in the bad credit category. There may also be people who are rendered financially incapable due to physical redundancy. People who have no visible sources of income, due to divorce or unemployment, are included as bad credit people. There is a special type of loan for bad credit home loans Brisbane, which is called a sub-prime loan. A sub-prime loan is given against the property itself as the collateral, more like an equity loan. They are given at interest rates higher than normal loans.
For more info, Call Us: 1300 740 485
Today there are several lenders willing to lend to people with bad credit. The entire lending process is a question of perspective. It is dependent on the way the lender visualizes the capacity of the borrower. Hence, if a particular lender refuses the loan, one can shop around. This is applicable even if one wishes to hunt for lenders offering lower rates of interest. It is advisable to get at least three different quotes before deciding on a suitable lender.
For more info, go to: http://www.oysterfinancial.com.au/loan_services/home-buyers
