There was a time when you could find no credit check mortgage loan. But, that is not the case anymore now. All lenders invariably do a credit check to fulfill the requirements set out by the National Consumer Credit Protection (NCCP) Act. Simply because no credit check mortgage programs have ceased to exist, it does not imply that you cannot get a home loan with a bad credit.
Bad credit history does not necessarily spell doom for your dream of owning a house. If you can amply prove the adverse circumstances that led to bad credit history, lenders are open to approve a home loan. No lender offers home mortgage loans no credit check but a lot of them are willing to work with people having bad credit, discharged bankruptcy, defaults or missed payments, court writs, among others. Discuss your situation with the lender to understand the various options you can qualify for.
Home loans especially for people with poor credit are available. There are lenders that can lend up to as much as 90% of the property value including Lenders Mortgage Insurance (LMI). The LMI is a one-time fee which is charged when you borrow more than 80% of the loan to value ratio. So, it more than offsets the benefits that mortgage no credit check would bring.
While you cannot get no credit check mortgage loan, you can still get a good deal on a bad credit home loan. The key is a strong deposit. Usually lenders require customers to pay a deposit to the tune of at least 10% of the purchase price. Of this, 5% must be from genuine savings that is savings that you have held for more than three months. These can include shares or managed funds too. In case you borrow more that 85% LVR, you can expect lenders to ask for genuine savings. Therefore, to increase you chance of getting approved for a bad credit home loan, you must save towards deposit.
A lot of vendors rely upon Veda’s score to evaluate loan applications. Veda score is considered accurate and is able to predict high risk borrowers efficiently. If you are assessed as a high risk customer, do not panic as it does not reflect your repayment capability. In such a scenario, it is best to seek expert’s advice and put you in contact with lenders that can get a favorable assessment of your application.