4 Steps To Getting a Mortgage If You Have a Criminal Record

Mortgage lenders in Australia are taking more time than ever looking into an applicant’s past in order to determine their eligibility for a mortgage. After the credit crisis, financial institutions are much more stringent when deciding who they’re prepared to lend money to. They look at credit history, job security and past addresses. And if they discover you have a criminal record, they are likely to doubt your suitability for a home loan.

If you’re a cash buyer you can get a house without having to go through the mortgage application process. However, if you need to borrow money in order to buy a home, you need to go through these checks and prove to the lender that you are a safe bet. You need to be fairly confident of meeting requirements before applying for your mortgage as a failed application will damage your credit rating and make it even more difficult next time round.

There are many repercussions to having a criminal record but not being able to get a mortgage doesn’t have to be one of them. Here are four steps to getting a mortgage when you have a criminal record:

Plan Ahead

When you are planning to apply for a mortgage but know that your circumstances aren’t straight forward, allow for plenty of time. You don’t want to feel time pressure and instead need to know that you’re making an application at the right time in order to be accepted for a mortgage. Not all lenders ask whether you have a criminal record. However, if you were in prison during the past five years, this will show when you give your past addresses. Similarly, a stint in prison can affect your credit rating, which has a big effect on whether a lender accepts your application. You need to allow time to put right anything that you have the power to improve before applying for a mortgage.

Check Your Credit Rating

Checking your credit is an essential step to take in working out if now is the right time to apply for a mortgage. If your credit rating is poor – it can be downgraded if you’ve been found guilty of financial fraud for instance – you will need to wait until it has improved before making your application. Be wary of credit repair companies and do some research into how you can improve your score. Unfortunately, there’s rarely a quick fix.

Ring Insurers

Part of the problem when applying for a mortgage with a criminal record is the potential inability to secure home and contents insurance. Some insurers, particularly if you’ve been found guilty of a crime like arson, aren’t prepared to offer insurance to those with a criminal record. Mortgage lenders need to know that you can insure a property that both you and they will have invested in. Find out if you can get insurance before making an application.

Hire a Financial Advisor

An experienced financial or mortgage advisor knows the mortgage market inside out. They will have dealt with countless complicated applications through their years of practice. They will also know what questions each lender is likely to ask and who the strictest are when it comes to applicants with a criminal record. Find out how the financial advisor will be paid – through commission or by paying an upfront fee – and then be completely honest with them to find the best mortgage deal available.

It is possible to get a mortgage even if you have a criminal record. Tread carefully, take your time and employ the services of a seasoned financial advisor to stand your application in the best stead.