Bad Credit Refinance

We just wanted to send you a quick note to let you know the house settled at 3pm yesterday .We also want to thank you for all you have done for us. We have been trying to get this loan for almost 3 years. You have helped us get on our feet and finally allowed us to own our first home. You really don’t know what this means to us. It has been a long road, but you have made it worth the wait Thank You!!!!

Katie & Ken MacKenzie

Why won’t the banks let you refinance your home loan with bad credit?

Banks like things to be easy. They need things to be easy. Easy is fast, and fast is profitable. Their whole business is built on efficiency and repeatability. To ensure a consistent return for their shareholders, they need to minimise risk, get every employee to do the same thing, and follow the same rules and lending criteria. In other words, they have to adopt a cookie-cutter approach.

And when you have a bad credit history – even if you’ve already resolved the problem – you just don’t fit that approach. Your loan application requires more thought, different paperwork, and much more of it, and a significantly better understanding of personal finance than most lenders – usually relatively junior – loan officers possess. It may even require an entirely different legal and underwriting structure.

But some banks WILL still let you refinance

The big banks are pretty much out of the question. Going to them to refinance your home loan when you have a bad credit rating is like going to McDonald’s and asking them to make a pizza. They’ll look at you like you have horns.

However, a few reputable banks in Australia offer bad credit home loan refinance. Not many, of course, and when you apply with one, they make you work for it. Their application process makes the typical big bank refinance application look like a fun survey. They’re long, incredibly detailed, and full of questions that can mean instant rejection if answered incorrectly.

Fortunately, we’ve filled out bad credit home loan applications thousands of times already. So we can do it all for you.

We know which banks can help and how to get them to say “yes.”

Bad credit home finance is our speciality. We’ve been doing it since 2003, and we know all the banks that offer it, which can be trusted implicitly, what sort of information they require and what kind of answers you should avoid. We’ve even figured out the best loan officers (who say “yes” most often) and developed great relationships with them. And, of course, we’ve jumped through all the hoops of various bad credit home loan processes more times than we could count.

So, the part that would be hardest for you—choosing the right bank for your financial situation and applying—is the easiest for us. In reality, our real challenge can be getting all the necessary information from you! And that’s very important.

That’s why we take all the time we need to learn exactly what’s causing your credit history problems before we begin your loan application. It’s different for everyone, so we start with the basics—your assets, liabilities, and income—then move on to your objective, the details of your previous applications, and the banks’ responses.

This allows us to help you resolve the problem causing your bad credit rating, choose the most appropriate lender and loan officer for your unique situation, and paint a clear (and pretty) picture of your financial position in your refinance application.

Freedom Loan clients hardly ever decline as long as they meet the base criteria:

– Earn a household income that can support the repayments (a minimum of $100K depending on the loan size)
– Have a minimum of 10% of the purchase price in deposit (if new mortgage).

Can’t you do it yourself?

Sure. If you have the time, understanding and confidence, you can give it a shot and apply for refinancing on your own, even with a bad credit rating. But there’d still be one missing ingredient. And it’s a very important one…

Experience.

The banks may all look very similar on the surface. Still, once you’ve completed the paperwork for all of them as often as we have and developed relationships with the decision-makers, you learn they’re worlds apart. They all have a niche speciality. They have one product, a stringent set of rules, and one way to solve a problem. And they steer clear of anything outside of their comfort zone. Like all businesses, they try to stick to the work they can handle confidently, safely and efficiently enough to make a profit. Without experience, choosing the wrong bank when refinancing your home loan with bad credit is easy. Your application won’t match their solution perfectly, and they’ll say no. Then you’re back to square one and wasted weeks of valuable time.

And to make matters worse, the loan officer at the bank you apply with gets paid no matter what. It’s their job to minimise the bank’s risk, so they proactively look for reasons to say “no” to bad credit home loans. It could even be something as simple as saying the wrong thing casually. (And when you have a bad credit history, there can be many wrong things to say. It’s a minefield!)

Can you use a regular mortgage broker if you have bad credit?

Most mortgage brokers deal only with the big banks and don’t cater to people like you with a bad credit score. They cater to people who could refinance with any prospective lender and want someone to shop around for them and fill in their paperwork.

Like the banks, brokers stick to their comfort zone: quick, simple, turnkey loan applications. They’re not interested in bad credit home loans because they have as little experience applying for them as you do. Most wouldn’t be able to identify the cause of your problem, and even if they could, they wouldn’t know the lenders who could help or which one to choose for your particular situation. (In fact, most brokers will present you with a list of lenders and say, “Pick one!”)

In other words, if you use an average mortgage broker for your bad credit refinance application, there’s a pretty good chance you’ll get turned down again.

Declined with a good credit score?

Have you been rejected by a bank even though your finances are in good order? In 2017, regulation changes by the Banking Royal Commission have made it much more challenging to get a home loan – even for those with a good credit rating. This rejection can be confusing for people who know their finances are in a healthy state. Often the problem is as simple as having too many inquiries on your credit file.

Don’t worry, there’s hope! Australian banks may have become stricter, but refinancing is still possible, even if you have a poor credit history and have been declined multiple times. Let Freedom Loans help you solve all this. Contact us for professional advice, and let’s end your problem with bad credit home loans today.

Debt Consolidation Loans Before Refinancing

Debt consolidation loans can be a viable strategy for individuals juggling multiple financial commitments with high interest rates. By consolidating these debts into a single loan – potentially with a lower interest rate – you can simplify your monthly payment requirements, reduce the amount of interest you pay over time, and even improve your credit score by making consistent, on-time loan repayments. For homeowners, this might involve refinancing your home loan to consolidate your mortgage, personal loans, and other debts into a new loan with a potentially lower rate.

The Role of Specialist Lenders

Specialist lenders are key players for individuals with bad credit histories seeking to refinance or consolidate debts. Unlike most mainstream lenders, specialist lenders are more willing to consider applications from individuals with less–than–perfect credit histories, offering more flexible terms and better interest rates and understanding the nuances of each borrower’s financial situation.

Home Loan Refinancing Options with Bad Credit

Refinancing your home loan offers an opportunity to secure a lower interest rate, reduce your mortgage repayments, or alter your loan terms. If you have a bad credit score, home loan refinancing can also provide a path to consolidate your debts under a single, more manageable loan. It’s essential, however, to consider the potential costs associated with refinancing, such as break fees from your current mortgage, additional fees, and the implications of extending the loan term.

Navigating Refinancing Approval with Bad Credit

Securing loan approval with a bad credit history is challenging but not impossible. Preparation and transparency are crucial. Be ready to explain the circumstances that led to your bad credit rating and demonstrate your steps towards financial stability. These include a regular savings fund, a detailed budget, and a clear plan for consistently paying off your loan balance.

Financially Responsible Borrowing

Getting a loan with bad credit requires a commitment to financially responsible behaviour. This means carefully assessing your ability to meet home loan repayments, avoiding taking on too many loans, and prioritising debts with the highest interest rates. A key strategy is to use your existing home equity wisely and ensure any mortgage refinancing or loan application improves your overall financial situation, not just provides a temporary fix.

Final Thoughts

Refinancing your home loan or consolidating debts can be a beneficial strategy to regain financial stability, especially if you have a bad credit score. By understanding your options, working with a specialist lender, and committing to responsible borrowing, you can navigate the complexities of securing a new loan or refinancing your home loan. Remember, every financial decision should be made with a clear understanding of the terms, potential benefits, and risks involved.