Having a low credit score doesn’t necessarily mean you’re irresponsible or “bad.” You might have been involved in an unfortunate life situation like job loss, injury, divorce, or business failure. These types of situations might have resulted in a poor credit file history. Though you might have a low credit score, lenders know that it is still possible for you to pay your debts. Thus, there are bad credit home loans in Australia made available by specialist or non-conforming lending companies. Personal loans bad credit is also available. Now, let’s delve into the different types of home loans.
Types Of Home Loans For Those With Bad Credit
- Paid and Unpaid Defaults Home Loan
Home loans of these types made available for people with bad credit are provided to those who have acquired credit file defaults.
- Discharged Bankrupt Home Loan
This type is offered to those who were previously bankrupt and are, at present, discharged by the law.
- Part 9 Debt Agreement
This is given to those who entered into a Part IX Agreement and have completed it. In Australia, if you are unable to pay your loans, you have the choice of seeing debt agreement administrators who can lend a helping hand in the preparation of a debt agreement made between you and creditors (or lenders).
When the fulfilment of the debt agreement is achieved, you are discharged of it. However, a Part IX will remain on your credit file up to seven years. Some creditors approve of your mortgage loan application if you have fulfilled a Part IX agreement on your credit file.
- Tax Debt Home Loan
This type is made available to those who have a huge amount of debt with the ATO (Australian Tax Office). Usually, the ATO debt is added to your mortgage. Thus, the borrower is clear from any other debt with the ATO.
- Debt Consolidation Home Loan
This type is made available to those who have a certain number of small amounts of debts that have been unmanageable. What happens is Australians choose to consolidate various forms of unsecured debt into their mortgage. This creates a simple form of monthly repayment scheme.