Credit Impaired Home Loans

Key features

Credit Impaired Home Loans are provided to borrowers who don’t meet standard banking lending policies. Borrowers who have blemishes on their credit file, such as defaults and court judgements are considered for Credit Impaired Home Loans. Lenders will charge a ‘rate for risk’ for these types of borrowers, noting traditional banks generally will not consider these types of borrowers at all. Whilst it is a more expensive home loan for the borrower, the borrower needs to understand the lender is taking on considerable risk in providing the finance.

Credit Impaired Home Loans are usually utilised for refinancing existing homes due to divorce and/or business failures occurring.

Advantages

Enables a borrower to refinance or purchase an existing residential property, regardless of their credit file situation. Discharged bankrupt borrowers are also eligible too.

Considerations

Post GFC, there are a small amount of lenders providing Credit Impaired Home Loans. Credit Risk Fees along with high variable interest rates need to be thouroughly weighed up before rushing into one of these types of home loans.

Borrowers can generally refinance out of a Credit Impaired Home Loan into a traditional home loan after displaying good conduct for a 2 year period. Exit fees will need to be investigated further to ensure the economical viability of refinancing within the 1^st 5 years, depending on the initial loan size.

Suitable for

All types of borrowers who don’t qualify for a traditional lender’s lending policy.

Credit Impaired Home Loans

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* Comparison rates are based on a loan amount of $300,000 over a 30 year term. Comparison rate schedules are available via each lender’s website or by contacting Compare-Homeloans. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates are effective as of 11-01-2011.

All information provided is a guide only and may not be complete for your purposes. Whilst displayed rates are regularly updated, neither Compare-Homeloans nor the Providers warrants the accuracy of any information and you should confirm it with the Provider before acting on it. Except for responsibilities implied by law which cannot be excluded, neither Compare-Homeloans nor the Provider is responsible for any loss, damage, cost or expense incurred by you as a result of any error, omission, or misrepresentation in relation to the data herein.