At the moment, they’re not lending to everyone, they’re initially looking at people who have well and truly got past their bad credit event and are nice and stable now. The credit matrix defines acceptable bad credit as:
- Unlimited adverse credit (paid or unpaid) when registered over 24 months prior to application
- Minor defaults under $1,000 ignored
- Discharged bankrupts considered from day after discharge
Other restrictions: Construction loans
Finally there is a lender doing bad credit construction loans! We’ve only been waiting for this since 2001…
But they’re dipping their toe in to test the water first so there are a couple of rules to adhere to:
Category 1 & 2 locations – They won’t lend anywhere, only Cat 1 & 2 locations.
- Cat.1 locations are major capital cities and large country towns (e.g. Dubbo, Rockhampton and Shepparton are Category 1)
- Cat. 2 locations are medium country towns. (e.g. Lithgow, Swan Hill and Gympie are all Category 2)
They’re done on a suburb by suburb rating so if you’re in a medium country town then best to ring on 1300 139 883 to check that your location is acceptable.
What bad credit will they accept?
- Maximum loan size $850,000 for construction loan
- Maximum land size 5 acres if you already own the land
- Maximum land size 2.5 acres if you’re buying the land (Max. land only loan $650,000)
- Must be for Owner Occupiers only (not investment)
- Maximum loan to value ratio (LVR) 90% (you need at least 10% deposit or existing equity plus costs – Genuine savings not required)
- NO guarantors
There are a number of small restrictions which we can check with you about your scenario however the construction loan will generally need to be a fixed price contract with a registered builder. At this stage they are NOT lending to owner builders
That’s the good news for the moment, there are a few private lenders who will consider credit impaired construction loans, owner builders and other variations however they are on a case by case basis and are very fussy about where the property is and work at much lower LVR’s.
If you’re situation fall outside the guidelines above but you have a low LVR, feel free to call on 1300 139 883 to see whether one of the alternate lenders would suit
Ready to get started? Call 1300 139 883 to speak to one of our trained loan experts or send an email to email@example.com and we’ll get back to you.