Bad Credit Home Loans

Frequently Asked Questions

• How do I apply for a bad credit home loan?

  You can apply for a Rapid Finance bad credit home loan online or over the phone via a simple process that takes just minutes. To begin, simply provide your personal details and the nature of your desired loan. For more information, contact the Rapid Finance team on 1300 467 274 or complete a Free Finance Assessment via the form on this page.

• What does the process involve?

  As home loan experts, the Rapid Finance team has access to a vast range of finance options that we can customise for almost any situation, including customers with a poor credit history. This could involve anything from an unpaid utility bill from years ago to a previous bankruptcy. Once you apply for a home loan, a Rapid Finance expert will get in touch to assess your unique circumstances, the options available, and the best home loan solution within those parameters. They will even help you correct any mistakes in your credit history or explain the way to do it.

• Do I have bad credit?

  Poor credit history covers a range of circumstances. A client may have overlooked a bill, or have experienced bankruptcy in the past, to name a couple. We know life gets in the way, whether it’s a clerical miscommunication or a marriage breakdown that has thrown a spanner in the works for your credit situation. Comprehensive credit reporting has advanced over the past few years, with banks reporting 24 months of payment history on any credit facility you have back to credit reporting agencies. Whatever the reason for poor credit history, it can make it hard to secure finance.

  Most people are aware if they have bad credit history, but if you’re unsure, contact the Australian Credit Reporting Agencies for a copy of your credit history. There are 3 Credit Reporting Agencies in Australia:

  1. Equifax

  2. Illion

  3. Experian

  Of these, Equifax is the most prominent; however, Illion has grown in recent years. Prospective lenders are likely to check at least one, if not all three of these agencies, depending on which agency they subscribe to. As someone looking for a loan, it’s very tricky to find out which agency your prospective lender works with.

  Avoid the hassle and let the Rapid Finance team handle these questions for you. You can also learn more about bad credit loans here.

• What interest rates can I expect on a bad credit home loan?

  While there is no universal interest rate that applies to every home loan, generally, the stronger your financial position/credit history is, the easier it is to secure home loan approval from most lenders – and at lower rates. Because of the complex factors that decide interest rates, the information on online comparison websites is often limited and can be entirely irrelevant to those with bad credit histories. 

  Rapid Finance experts comb over the details of your financial profile to assess the full picture of loan possibilities available to you. If you are re-financing, the more equity in your property the better – Generally you will get a lower rate, the more equity you have in your property.

• I have a new job. Can I get a home loan?

  Yes. It’s possible to secure a home loan even if you are with a new employer. If you work full-time, you can often apply straight away. If you work part-time or on a casual basis, you may need to pass your probationary period in the role before applying. Again, every situation is unique. You will be a more attractive candidate to prospective lenders if you have experience in your current field of work and can prove a stable income. E.g. – If you are in the same industry, have a new job and on probation, quite often we can achieve getting the loan for you. In some cases, new employment and a different industry can even improve your financial position. Contact the Rapid Finance team for expert insights on your profile.

• I was once bankrupt. Can I secure a home loan?

  Yes. Even if you have previously been bankrupt or had a Part IX Debt Agreement, you can achieve a home loan. While these major defaults remain on your credit history for at least 5–7 years, your new circumstances might convince lenders to approve your loan.

  In such situations, you need to build and then strengthen your case for finance. The Rapid Finance team specialises in this area and knows what lenders are looking for – so you can be confident you have the best-possible shot at securing your home loan.

• Can first home buyers get a bad credit home loan?

  Yes. First home buyers can get a home loan – even if they have a bad credit history. With the right savings strategy in place and a budget that is affordable and achievable, the dream of owning a home could be within your reach.

  As a first home buyer, you may even be eligible for a First Homeowners Grant, or FHOG. These grants will vary from state to state, so be sure to check your state’s revenue office for more information. There are some lenders that will lend up to 95% of the property value, self-mortgage insured (As the lend is over 80% of the property value) – So there is lots of options available to anybody wanting to get into their dream home!

• I’m on Centrelink or a pension. Can I get a home loan?

  Yes. Home loan approval hinges on your income and ability to repay your loan. Many Centrelink payments, like the age pension, family tax A and B, parenting payment along with veteran’s pension among others, can constitute income. If you supplement your Centrelink income with just one other income source or if Centrelink is your only income, you’re closer to a home loan than you think! If in doubt, speak to our team of Rapid Finance experts for a clear evaluation of your options.

• What is a loan-to-value ratio?

  A loan-to-value ratio (LVR) is the value of the loan divided by the total value of the property in question. This calculation shows what proportion of the home has been financed with the home loan and what remaining proportion is financed by other sources, like savings.

  For example, if your new home is $450,000 and the approved loan in question is $380,000, the LVR is 0.84. That is, 84% of the home was financed with the home loan, with the remaining 16% financed another way like deposit put in by the customer.

  For a re-finance and with capital growth in property, the 16% with the above example may be equity due to the property going up in value – Of course, properties going up in value, all depends on the type of property, where its located, size etc.

• Fixed and variable rates – what’s the difference?

  A fixed interest rate remains the same over a period. A variable interest rate adjusts over the loan period. The choice between these types of interest rates may come down to your personal preference, but a Rapid Finance expert can talk you through the pros and cons.

  For example, a variable rate could take advantage of lower future interest rates, but there is also a risk that interest rates may increase. While a fixed rate of interest is more stable and predictable, there may be additional fees to consider.

  Currently, as interest rates are so low, it is a good time to fix, however, all options should be considered depending on your circumstances.
  
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