Home Loan with Defaults

Have you defaulted on your home loan?

Default is filed by your mortgage lender when you are minimum 90 days late on your repayments. When you default on your home loan repayments, your lender can demand an immediate upfront payment of the outstanding debt.

Defaulting on your home loan - or in fact on any loan - becomes a legal matter, however, not all cases will be taken to court although home loan defaults will need to be filed in court by your lender.

Some examples of the status of defaults are:

  • Paid – Paid in full
  • Unpaid – Outstanding and currently awaiting payment
  • Settled – this when you have agreed on a payment plan to help you pay off the debt

Can I still get approved?

Having several defaults on your credit file does not stop you from applying for a home loan or getting approved. The length, the full figure and the type of defaults are all taken into consideration by the lender.

For example:

  • Some lenders will lend up to 95% of the property value if you have defaults under $500.
  • Unpaid defaults or large figure paid defaults will allow you to borrow up to 95% with Non-Conforming / Non-Bank lenders.

Advantages for using a specialist lender (Non-Conforming Lender)

Specialist lenders tend to be more flexible and more understanding as they are welcome to take on the High-Risk Borrowers who have more defaults and have a history of bad credit.

Although these lenders still will not just lend to anyone, they still have criteria’s which will need to be met.

Some examples below are why borrowing with a Specialist Lender could be in your favour:

  • Less income evidence – More Low Doc loan opportunity.
  • Some lenders will not require you to have Genuine Savings for deposit.
  • Low set up and ongoing costs.
  • Offer one on one customer service.
  • Competitive rates can lead to cheaper options in the long run.

If you wish to know more about home loan defaults and Non-Confirming lenders, this will be the best time to contact Mortgage Providers on 1300 656 600.