How Can I Buy a House with Bad Credit and No Deposit?

The original home loan is a conventional mortgage. It requires a 20% deposit and three months of bank statements and payslips. Things changed in the 2000s when the economic situation became precarious. Plus, Australians became distrustful of variable-rate loans. In 2022, some individuals can buy a house with bad credit and no deposit. However, it has some caveats to consider.

Without a deposit and with bad credit, the applicant becomes a high risk. Deposits ensure that homebuyers have skin in the game. Their credit indicates whether or not the applicant pays their bills on time. 

Banks must remain conservative in their lending practices. Since they service savings accounts and deposits, banks must maintain a level of liquidity. Thus, they don’t offer too many no-deposit and bad credit score mortgages. Mortgage House is a non-bank lender. We can issue home loans to homebuyers with low credit scores and no deposit. However, a trade-off exists. The homebuyer will incur higher home loan interest rates.

Sometimes the higher rates become the price of becoming a homeowner under less than ideal circumstances. The good news is that once an individual becomes a homeowner, their finances change. If they repay their home loan on time, they start building a better credit history. Plus, their home starts accruing equity. This can become a recipe for a better mortgage down the road. 

Buy a House with Bad Credit Conclusion

It’s possible to buy a house with bad credit and no deposit. To explore your options, contact our Mortgage House loan specialists today.