One of the most exciting milestones in someone's life is owning their dream home. However, because purchasing a house can be costly, achieving this dream may not be easy.
Applying for a home loan or mortgage is an option to be a step closer to making your dream happen. While doing your research on home loans, it is natural to come across a few myths and misconceptions.
Here are five of the most common you’ll hear about.
1. Bad Credit History Won't Qualify You
A popular myth is that having a bad credit history disqualifies you from getting a home loan. In fact, some lenders offer home loans especially created for people with a bad credit history suitable for their needs.
Find an experienced broker who can help you determine how to go about this.
2. There Are Limitations to Bad Credit Home Loan
Even though a bad credit home loan is designed especially for people with financial problems, including previous bankruptcy and delinquent payments, you can use it in other cases, too.
Many Aussies can't get approved for a mortgage because they have a credit file that is not detailed enough, have too much debt, or have not made enough money recently to show a lender that they can afford their mortgage.
Sub-prime lenders can help with this problem as they often offer better interest rates and mortgages to people who cannot work with mainstream lenders.
3. Every Default Is the Same
Many people in Australia think that no matter how big or small an unpaid bill is, it will still be recorded as a default. However, the truth is that no lender will consider a due statement no matter how big or small the amount is.
On the other hand, lenders have the process of handling paid and unpaid defaults.
An unpaid default will destroy your credit history because the lender will assume you overlooked the problem for too long. A paid default makes you seem more responsible, as you accepted responsibility and tried to fix it.
4. Nobody Cares with My Story
That is not true. Creditors are much more interested to hear your stories. They will understand every life situation that will significantly impact your paying capacity such as having an expensive surgery, marriage breakdown, or losing your job.
5. You Can't Get Rid of Your Loan as Early as 30 Years
Using a bad credit mortgage to buy a home can be an excellent strategy, provided you have already prepared a budget and have started saving for your down payment.
A bad credit home loan is a short-term solution, and in 6-12 months, you can get rid of it. As soon as your defaults expire or you show good repayment history, you generally can refinance into a standard loan.
Being able to purchase your own home is a great accomplishment. It is important that you select a good mortgage company that will help you find the right mortgage loan.
Are you searching for the best home loans in Sydney? Wealthy You will help handle your specific financial needs. Call us today.