How much can I borrow with a default?

Any general questions you might have in regards to loans and finance.
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Otto Dargan
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Re: How much can I borrow with a default?

Post by Otto Dargan »

Hello Shelly. Welcome to the forums.

You can get approved for a home loan even if you have defaults on your credit file. The type of default, amount, and how old they are, are all taken into account. Generally speaking, paid defaults are looked at more favourably than unpaid defaults.
  • Less than $500 in paid defaults: You can borrow up to 95% of the property value.
  • Less than $1,000 in paid defaults: You can borrow up to 90% of the property value.
  • Any unpaid defaults or larger paid defaults: You can borrow up to 90% of the property value with a specialist lender.
It is imperative that you avoid applying with unsuitable lenders and being knocked back due to your bad credit history and adding more unnecessary credit enquiries to your credit file.

We specialise in bad credit home loans.

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 mortgage.

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

User avatar
Otto Dargan
Mortgage Specialist
Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: How much can I borrow with a default?

Post by Otto Dargan »

Hi Shelly,

To qualify with one of our banks, you must meet the following criteria:
  • You must have less than $500 in defaults if you’re borrowing up to 95%.
  • You must have less than $1,000 in defaults if you’re borrowing up to 90%.
  • You must have a reasonable explanation for the adverse listing.
  • No more than 2 defaults in total for one application.
  • You must have paid the default at least six months prior to the application.
  • If you’re purchasing a property then you must have a minimum of 5% in genuine savings.
  • No other policy exceptions are allowed.
Just to be clear, if you don’t meet the criteria listed above you can still qualify with one if our specialist or non-conforming lenders from our panel of almost 40 lenders.
Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

User avatar
Otto Dargan
Mortgage Specialist
Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: How much can I borrow with a default?

Post by Otto Dargan »

Hi Shelly,

To improve your chances at approval, 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 as large of a deposit as you can, the minimum required is 5% of the purchase price.
  • 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.
You can use our credit score calculator to identify any issues with your mortgage application. It uses a system similar to what banks and Lenders Mortgage Insurer when assessing loans.

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

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

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