If you’re thinking that your bad credit will prevent you from getting a house, think again. You can definitely get a home, in spite of your bad credit. There are plenty of bad credit mortgage loans for people in your shoes.

That being said, let’s see how you could get your hands on one of the bad credit mortgage loans designed for Aussies. Your priority should be to highlight your reliability as a borrower. How do you do that?

Provide a Larger Down Payment


Even though credit score is the first thing a bank or lender looks at before approving a loan application, there are many other things you could do for growing your chances of getting a loan. For instance, you could make up for the low credit score by offering a more consistent down payment.

Providing a larger down payment might persuade a lender to give you a chance. That is because it demonstrates that you have the ability to save money.

Secondly, a significant down payment diminishes the loan-to-value ratio. Additional equity will reduce the risk of the lender if a loan default happens. And finally, this strategy would actually diminish the debt-to-income ratio, which also makes the loan more affordable to the borrower.

In this direction, if getting a house isn’t an urgent matter, you should consider saving up money until then purely for this purpose.

Address the Lender’s Perception of Financial Risk


It is obvious that bad credit indirectly signals that a borrower is a high risk to lenders. Even so, credit reports enlist various data that could either confirm or diminish the perception of risk.

For instance, credit problems that result from high expenses due to a closing business or medical issue might be conveyed as one-time deals, which don’t necessarily reflect a comprehensive picture of the borrower’s financial background.

In this respect, one way of showing that you are a reliable borrower is to prove that you are financially stable, especially at the time of application.

What you should do is to demonstrate that you have steady employment. And by all means, avoid making late payments to your current loans. Continue paying your bills on time. These are small, yet meaningful ways through which you could enhance your credit score and chances of getting bad credit home loans.

Choose a Mortgage Broker that Understands the Market

Before you pick a lender, you should shop around, and select the one that fully understands the Australian financial market and your situation. So, before meeting with a broker or lender that provides bad credit mortgage loans, you should highlight your situation comprehensively.


As it is implied, a considerable part of the decision-making process for lenders in the mortgage approval process is linked to the risk presented by the borrower. Still, bad credit mortgage loans are crafted for people in such situations. Even so, it would be ideal to minimise the lender’s risk as much as possible by showing your reliability and financial stability.

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