Not all lenders are the same and, when it comes to applying for a mortgage, they respond differently to minor indiscretions and even outright disasters.
Lo-doc loans or even credit-impaired loans are often solutions to those who want to buy a home, but whose history is less-than perfect.
The rates on these loans are not necessarily punitive and they are often a mid-term solution until a borrower can move on to a standard, full-doc home loan – often with an interest rate beginning with a 3.
Even these interim solutions can have sharpish rates as many lenders price on risk – the safer the loan, the better the rate.
Here are some client examples of how we have arranged finance for clients whose finances were not run-of-the-mill
· A company director whose business had recently seen a major revenue growth. Your average bank would require 2-years’ business history before they would give her the loan she wanted. Thankfully, because she only wanted to borrow 55 per cent of the property value, she was able to move into her dream home with an interest rate of 4.39 per cent
· An investor who had been so haphazard with her loan repayments that, when she asked her bank for some extra cash for renovations, her application was turned down. We refinanced her loan with a non-conforming lender to get her the cash she needed. Then, six months later, we arranged an investor loan with Citibank at 3.99 per cent.
· A couple where the husband was so sick, he could not work for a while such that they defaulted on some financial commitments. They came to us not longer after she had received an inheritance affording them the chance to start afresh. We coached them to fix up their defaults asap (lenders prefer that), then we financed their home purchase through a non-conforming lender. After 2-years’ solid repayment history, we refinanced them with CBA
Just because you have not been lily-white with your credit history, it does not mean that you cannot get a loan. And, in many cases, you can get it at a fairly sharp rate.
But the process can be complicated; not just any-old lender will do it and often its specialised lenders who only go through brokers.
If you want to know more about how you can get finance, even with a less-than-perfect credit history, please contact me on 1300 30 67 67