Following the credit crunch of 2008, many banking institutions in South Africa changed their lending policies to align with changing consumer trends. They also introduced various measures to ensure that their business interests as financial institutions were protected. One measure that was introduced across the board was that of more stringent lending criteria.
As a result, fewer consumers were approved for mortgage loans. These circumstances prevailed, despite these individuals having good credit records.
So the question is, are there mortgage loans for bad credit?
In recent years there a new trend has developed where mortgage financing comes from a group of private investors. So even if you have a bad credit record, you might still be able to access mortgage loans.
A select number of micro lenders specialise in providing this service as well. Do your research to make sure that the lender you approach is NCR-registered and compliant with the National Credit Act.
What are the basic requirements?
You need to own at least 65% equity for bad credit mortgage refinancing or for a new house purchase
You must be willing to pay for higher mortgage insurance rates
What you need to know about mortgage loans for bad credit:
Lending institutions that provide these services usually don’t operate under the stringent requirements that banks do.
Some lenders don’t do credit checks and many don’t require collateral.
Qualification depends on how poor your credit history is. Many lenders will take your affordability into account.
A good mortgage broker should be able to help you take the steps you need to rehabilitate yourself.
In South Africa, most lenders will consider your application if you have already paid up the bad debts.
To get access to mortgage loans for bad credit, you can talk to a home loan specialist.
By visiting www.uapply.co.za you can apply online for mortgage loans for bad credit. Following the pre-qualification process, a consultant will call you to complete the application.