If you are a first home buyer with bad credit your chances of obtaining a home loan are rather slim. The main reason for this, is that most first home buyers have a limited deposit. However, once you have any bad credit on your credit report you will need to have at least 20% deposit as well as own funds to cover purchasing costs such as stamp duty, legal fees etc.
For a purchase of $350,000 in Victoria,for example – you will need to have over $85,000 of your own funds. How often would a first home buyer have such a deposit?
One solution if you find yourself in such circumstances is to ask your family for a loan. If your parents have a paid out home or one with a small mortgage, you could ask them to borrow some of this deposit out of their mortgage and on-lend it to you, the applicant. If you are one of the lucky ones whose parents can assist, you may be able to qualify.