Parental loss and funeral costs caused bad credit

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Layla
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Joined: Fri May 10, 2019 1:40 pm

Parental loss and funeral costs caused bad credit

Postby Layla » Fri May 10, 2019 1:42 pm

Hi, when both my parents passed away two years ago, I had to take care of their funeral proceedings, the funeral director quoted me $15,000 for the whole ordeal, which I put on my credit cards. I was in the process of looking for a new job in a new city after being made redundant as such I couldn’t afford to make the full repayments on those debts. I paid out one of the cards which I still use for my day to day living expenses, as for the second card’s $5,000 balance which simply put I couldn’t afford to repay at that time, it was listed as a default. I paid off the default fully once I secured another job in Melbourne but my credit score is still less than ideal. We’re both first home buyers looking to purchase our first family home preferably in and around Ballarat, but I’m apprehensive about our chances of approval due to my bad credit score. What’s the lending criteria around bad credit?

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Otto Dargan
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Re: Parental loss and funeral costs caused bad credit

Postby Otto Dargan » Fri May 10, 2019 2:06 pm

Hello Layla. Welcome to the forums.

A death in the family or a job loss can cause you to have bad credit however, that doesn’t mean you can’t qualify for a home loan. There are a few prime and specialist lenders who don’t knock back your mortgage application simply because of a few blemishes in your credit file. They instead take a more case by case assessment and try to understand whether it was a one-off event or if you’re simply living beyond your means that caused you to have a bad credit score.

Large paid defaults between $3,000 to $500,000 are considered on a case by case basis if you can provide a very good explanation supported by strong evidence for the default. We can lend up to 90% of the property value with a specialist lender.

Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a bad credit home loan.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Layla
Posts: 3
Joined: Fri May 10, 2019 1:40 pm

Re: Parental loss and funeral costs caused bad credit

Postby Layla » Fri May 10, 2019 3:07 pm

We’re only looking to borrow 80% or around $2,60,000, so the deposit won’t be a problem. How do I make sure I have the best chance of approval as I don’t want to have any more credit enquiries added on my credit file?

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Otto Dargan
Mortgage Specialist
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Location: Sydney, Australia
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Re: Parental loss and funeral costs caused bad credit

Postby Otto Dargan » Fri May 10, 2019 3:49 pm

Hi Layla,

Absolutely, having too many credit enquiries on your credit file is a red flag to potential lenders. Do not apply with lenders unless you’re sure of approval as it only adds more enquiries to your credit file tanking your credit score even further.

To increase your chances of approval with bad credit, you can take these simple steps:
  • Provide a default explanation letter.
  • Provide evidence to back up your explanation of the cause of your defaults.
  • Save up at least 5% of the purchase price and provide as large a deposit as possible. You’ve saved up 20% which will be looked at favourably.
  • Pay any unpaid defaults and get the credit provider to mark them as paid on your credit file before you apply for a loan.
  • Apply with a lender that can accept borrowers with defaults.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Layla
Posts: 3
Joined: Fri May 10, 2019 1:40 pm

Re: Parental loss and funeral costs caused bad credit

Postby Layla » Fri May 10, 2019 5:16 pm

I guess beggars can’t be choosers. Sounds like our only option is a specialist lender, what are their interest rates like?

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Otto Dargan
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Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: Parental loss and funeral costs caused bad credit

Postby Otto Dargan » Fri May 10, 2019 6:26 pm

Hi Layla,

Specialist lenders are taking on higher risk when approving people with bad credit as such they charge a slightly higher interest rate to mitigate this.

Specialist lender interest rates are on average 2-2.5% higher when it comes to bad credit interest rates. You’ll find that interest rates vary depending on the nature of your adverse credit listing and how long it’s been on your credit file.

We are specialists in bad credit home loans.

We will even help you refinance your bad credit mortgage with a major lender at a competitive when the default has fallen off your credit file. Negative information such as defaults usually fall off your credit file in five years.

Speak with one of our experienced mortgage brokers by giving us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a bad credit home loan.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts


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