Bad Credit Mortgage – What Is Considered Bad Credit?
Potential borrowers who are researching the various types of home loans and bad credit mortgages may want to understand what is considered bad credit by home loan providers. In Australia, home loan providers like to see credit scores between 500 and 700. Generally, the closer an applicant’s credit score is to 700, the better. This would mean that credit scores under 500 could be considered bad credit.
However, having bad credit does not mean that a potential borrower will be unable to gain approval for a mortgage. There are various types of bad credit mortgages that potential borrowers can research, compare, and apply for.
Bad credit home loans can allow potential borrowers with bad credit to successfully become approved for a mortgage even if they have been turned down by banks. However, bad credit home loans come along with high-interest rates which can result in a borrower paying more for their mortgage over time.
Borrowers who are not interested in applying for bad credit home loans can follow the following steps to begin increasing their credit score before applying for a mortgage:
- Paying off any existing debts, including high credit card balances
- Avoiding being required to pay late fees
- Paying all bills in full and on time
- Ensure credit card balances are kept low
If you are interested in learning more about bad credit mortgages or are ready to apply for a home loan, reach out to the Mortgage House home loan providers for specialized assistance and additional information.