Finding a Bad Credit Home Loan as a Discharged Bankrupt

Rapid Finance on 15 December 2015

  • Yes, you can get a home loan as a discharged bankrupt
  • Your options may seem limited at first
  • A home loan broker can help you discover a great bad credit home finance option

Bankruptcy can be a trying time on you and your family. Restrictions on what you can and can’t do limit your plans for growing your wealth and financially starting over. There is no way that you can get a home while bankrupt, but once you have been discharged you can begin looking into your credit options again.

However, even after being discharged from bankruptcy you will still experience a hard time finding a loan. That’s because your bankruptcy is still listed on your credit history. Does this mean that a home loan is impossible? In short, no. Read on to find out why.

moving on from bankruptcy

Want to move on from your bankruptcy? Talk to the bad credit home loan experts. Call 1300 467 274 today.

What is a discharged bankruptcy?

Bankruptcy generally lasts three years. Once this period is over, you are 'discharged' from your state of bankruptcy. However, this does not mean that the financial consequences of bankruptcy are over—a previous bankruptcy can impact your financial identity for life.

So, what does discharged bankruptcy mean? Put simply, it means that you can start building up your assets again. For example, you are allowed to purchase assets such as a new car or home. But this is much easier said than done.

First of all, bankruptcy will remain on your credit history for at least five to seven years. A bad credit history is a key reason for lenders to reject a loan application. Even after this period, your name will appear on the National Personal Insolvency Index for life.

What is a Part IX debt agreement?

  • Much like bankruptcy, a ‘Part IX’ will negatively affect your credit history.
  • Although it is different to full bankruptcy, it is still considered an ‘act of bankruptcy’.

What can be done to increase the chance of home loan approval?

increasing home loan chances

If you are a discharged bankrupt, then you may be wondering about your chances of getting credit, such as a home loan, in the future. Lenders see a past bankruptcy and take that as a signal of poor financial management and will be reluctant to offer you a home loan.

This means that you need to take steps to make your financial history as squeaky clean as possible, even if you can’t entirely scrub out that bankruptcy black mark. So here are some tips to improving your home loan chances:

  1. Reduce your debts
  2. Save a home loan deposit
  3. Get into good financial habits
  4. Find a mortgage co-signer
  5. Be stable in both your employment and home address
  6. Maintain your current debts

Finding the right bad credit home loan

Even if you follow the above tips, it may not be enough to ensure that your application is strong enough to get a loan. For instance, a previous bankruptcy will stay on your credit history for years. In these cases, it’s helpful to seek out a bad credit home loan expert who can recommend finance for your situation.

bad credit home loan specialist

A previous bankruptcy may mean that you need to take a higher rate of interest or save up a larger deposit. So it’s important to shop around and make sure that you are getting a great deal. A home loan expert, like Rapid Finance, can help match your financial circumstance with an appropriate bad credit home loan.

But at Rapid Finance, we go above and beyond what is normally expected from traditional home loan brokers. In the past, we have helped our clients improve their credit standing by identifying where their credit problems are and discovering their financial strengths. We have even identified and helped remove mistakes on our customers’ credit histories.

Looking for more bad credit home loan resources?

Check these out:

Move on from your past bankruptcy. Call the Rapid team today on 1300 467 274.