There are a variety of factors that affect your credit history – divorce, illness, timing slips, redundancy, late payments, missed payments, and even bills that weren’t redirected after a move. If you have experienced any of these credit issues, then all is not lost for your loan application hopes. There are plenty of options you have to help get your credit back on track to successfully apply for a loan.
1. Deal With Your Credit Report
So, who should be considering buying a property in the current market? Quite simply, people should only be considering property purchases who have the safety net of a secure job, along with either enough money saved or other liquid assets.
Some will see this lower market as an opportunity to purchase property at a price that is materially much lower than it was earlier this year. Then there are those brave cashed-up people who believe that times like these are when fortunes can be made, and they hope to secure a property at once-in-a-generation bargain prices. And who knows, they could very well be right on the money.
It is actually quite likely that some excellent opportunities to buy will become available over the coming months, especially during the second half of this year. That means there are some savvy investors who are ready to buy, in preparation for a predicted rebound next year.
2. Shop Around
If you received a no from the first potential lender you approached, then try and try again. There are plenty of lenders available and just because one said no does not mean they will all say no. Lenders have different boxes to tick, so another lender may view your situation more favourably than the first.
Of course, it’s always smart to shop around no matter what you’re doing or looking for. Do remember, however, that if you submit multiple credit applications in a short period of time it can negatively influence your credit score. Proceed with caution, and if you want to avoid traps you should consider working with professionals like Seek Mortgages.
3. Explore Alternative Lending
If your credit issues are the only thing holding you back, you may find joy with a non-bank lender that offers more flexible products. The banks stick to fixed rules when it comes to loan assessments. The world has evolved since then and lenders like Seek Mortgages provide a different path to loans using a wider set of parameters.
4. Affordable Payments
It doesn’t matter who you secure your loan with, the lender is responsible for ensuring you can afford to make the agreed repayments. It isn’t worth getting into hardship so ensure you are able to meet the repayment demands.
If your deposit is less than 20%, you will likely have to pay an LMI (Lenders Mortgage Insurance) fee. It provides the lender with cover if you miss payments at any point. They’re a separate business with their own rules. Income source and credit history may leave you at risk of rejection, even if the lender has approved the loan. There is another way, of course. Third-party insurers and lenders like Seek Mortgages offer LPF (Lender Protection Fee to provide flexibility to assess the loan without requiring LMI provider approval.