Last Updated: 31st May, 2021

Bad Credit Mortgage Brokers have credit expertise to get a bad credit construction loan approved with unpaid defaults even though the lenders usually want the credit history to be perfect when going for construction loans.


Details Description
Customers Koby Hort and Summer Hort
Mortgage Broker Vivienne Than
Purpose To refinance existing land loan and build an owner-occupied property on it.
Loan Amount $416,997
Security $464,000
LVR (Loan to value ratio) 89.87%
Interest Rate 6.62% p.a.
Problem They had an unpaid default of $37,000 and could not refinance their current land loan.
Solution Vivienne worked to include at least 50% of the commission income which is a huge deal during this pandemic where lenders are not even looking into commission income.


Koby Hort and his beloved, Summer Hort wanted to refinance existing land loan and build a dream home.

Koby worked in a car dealership and his income was through commissions.

They hadn’t finalized on a builder and were looking to get pre-approved for a construction loan.

They dreamed of building a home with a quaint little garden full of delicate lavender blooms.

They wished to furnish it with everything rustic, antique lamps and new paintings daubed on perfect squares of canvas.

To fulfil their need of a perfect house, they applied for a construction loan at 90% LVR.


Major lenders were not willing to approve the refinance as the couple had unpaid defaults of above $37,000 listed in their credit files.

Even specialist lenders would be hesitant to take on a bad credit construction loan.

Also, Summer was on maternity leave and earned less than half of her actual full-time income during her maternity leave.

The loan application was reliant on the use of husband’s commission income to get the necessary borrowing power.

The loan application was done in February 2020 before the pandemic.

The pre-approval for a lower loan amount was subject to her return to full-time work and finalization on a builder.

When Summer returned to work in May, a new request for pre-approval was lodged for a higher loan amount.

But the lender had changed its policy stating that commission would not be accepted anymore during the COVID-19 lockdown phase.


Home Loan Experts’ mortgage broker Vivienne Than saw that Koby and Summer were well-qualified candidates.

  • The clients had a stable income.
  • Summer had demonstrated good conduct on her existing loan.
  • Summer had returned to work after her maternity leave.
  • Their jobs were secure and not greatly affected by the pandemic.

Vivienne performed a full credit assessment and serviceability, looking into their income, expenses and liabilities.

The lender declined the loan because their policy during COVID-19 pandemic didn’t allow them to accept commission as income from selling cars.

Vivienne also did some research and provided data on Koby’s employer and recent market car sales which helped build the credibility of the case (Koby’s employer was the largest automotive dealership in NSW).

She provided car sales history, letters/contracts from employers stating that the commission income was not affected by the COVID-19.

She provided documents that proved to the lender that the recent three months commission that Koby received was similar to last year’s income summary.

This evidence convinced the lender to use 50% of commission income from a standpoint where they were not accepting it at all.

However, this was still not enough to get the loan amount needed so Vivienne then looked at reducing the client’s existing liabilities.

She argued with the lender that if the income is reduced by 50%, then his child support commitment should be reduced proportionately.

Child Support Payments are determined based on the level of income – higher the income higher the payments need to be and vice versa.

In the end, the couple was able to get 90% LVR construction loan despite their $37,000 unpaid default using the car sales commission and reducing child support.

A Happy Ending:

Koby Hort and Summer Hort expressed their gratitude and willingness to again work with brokers from Home Loan Experts in the future.

The couple left a five star review for Vivenne for being an excellent mortgage broker.

Our mortgage brokers have worked at the credit department of many banks and specialist lenders so they understand exactly how lenders assess bad credit home loan applications.

Talk to one of our bad credit mortgage brokers by calling on 1300 889 743 or complete our free assessment form today.