Yes, you can qualify for a home loan even with bad credit. Some of our specialist lenders could get loan approvals for you even when you have some defaults on your credit history. The lenders will look into your credit file and Equifax score to calculate your credit score.
To qualify for a bad credit home loan, you need to:
Yes, you are eligible for the First Home Owners Grant (FHOG) even with a bad credit score. This grant is for people buying their first home.
You must meet the following criteria.
The applicant is a natural person i.e. is not a company or trust.
At least one applicant is a Permanent Resident (PR) or Australian citizen (NZ Citizens have automatic PR under Special Category Visa 444).
Each applicant must be at least 18 years of age.
All applicants and/or their spouse/de facto have not owned a residential property, jointly, separately or with some other person, in any State or Territory of Australia before 1 July 2000.
All applicants and/or their spouse/de facto have not owned on or after 1 July 2000 a residential property and occupied that property jointly, separately or with some other person in any State or Territory of Australia for a continuous period of at least six months.
Each applicant has entered into a contract for the purchase of a home or signed a contract to build a home on or after 1 July 2000. In the case of an owner-builder, laying of the foundations commenced on or after 1 July 2000.
The total value of the property does not exceed the cap amount (Cap amount varies between states).
This is the first time an applicant and/or their spouse/de facto will receive a grant under the First Home Owner Grant Act 2000 in any State or Territory (unless subsequently repaid).
At least one applicant will occupy the home as their principal place of residence for a continuous period of at least six months, commencing within 12 months of settlement or construction of the home.
Please contact your state government to confirm the criteria for your state as it may differ. In particular, the cap on the value of your property does vary between states and in some states, there is no cap.
Note that other first home benefits such as additional grants or stamp duty exemptions are offered by the state government and so they may have different eligibility criteria.
If your default amount is less than $500, then you can borrow up to 95% of property value. Please note that lenders will use credit scoring to assess loans at 95% LVR.
If your default amount is more than $1000 then you can borrow up to 90% of property value. If there are unpaid defaults or larger paid defaults, then you can borrow up to 90% (However, this is only applicable with a specialist lender).
If you’re borrowing less than 80% of the property value, you do not need to pay Lenders Mortgage Insurance (LMI) and you could even get a cheaper interest rate, even with bad credit, depending on which lenders you qualify with.
You can make use of our borrowing power calculator to get an estimate of how much you can get from banks or specialist lenders.
Our specialist bad credit mortgage brokers are here to help! Call us on 1300 889 743 or complete our online enquiry form for a free assessment.