Many people have indicated that the secured personal loan or home equity loan is best for them to consolidate debt and get out of a blacklisted credit condition. Banks are becoming more strict about lending money for a mortgage if you’re in a red alert or blacklist condition. It’s not as easy as it used to be in the past to get a mortgage when you have black listed items on your credit report.
Looking to buy your dream home, but have been denied a loan? Most blacklisted borrowers are not aware of their loan status before it is too late. Banks generally don’t call you if you’re on the list. While you might think this is one of the safest ways to protect you from falling prey to scammers, it’s also a sure way to lose thousands of dollars. If a mortgage broker or bank was willing to help you get out of debt, wouldn’t you want to know more about them?
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Download your credit report
If you are blacklisted, it may seem as if your chances of getting a home loan are slim. This is not the case, as there are many options available to give your home loan application a boost.
1. Download your credit report. You can do this by going online or by visiting any credit bureau and paying a small fee of about R50 for the report. Once you have the report, go through it carefully to make sure that all the information on it is correct. If you find any errors, get them corrected before you submit a home loan application to a bank or other financial institution.
2. Make sure you clear any outstanding debt before applying for a home loan. In order to get your home loan approved, you will need to pay off any outstanding debt first and then prove that you are able to service the home loan repayments each month.
3. Know which banks will approve your home loan based on your credit score, income and expenses and take the time to find out what the interest rates will be on these loans. Some banks have special products for people who are blacklisted but the interest rates may be much higher than those offered on conventional loans.
Check the report for errors and lodge disputes if you find any.
With a bad credit score, you are considered unreliable and a risk by banks. And applying for finance when you have a bad credit score is not likely to be approved. So the first step to getting finance if you have been blacklisted or have a bad credit score is to check your credit report and see whether there are any errors or inaccuracies on your report.
Then, if you find anything that does not belong on your report, lodge disputes with the bureaus. This will help clear up your credit history and improve your rating.
If you’re still waiting for the bureau to come back with an outcome from this dispute, we suggest delaying all applications for finance until the issue is resolved. The last thing you want is another hit on your credit score until this one is cleared up.
Pay off all your outstanding accounts
Many financial institutions don’t grant loans to people with bad credit scores. A few may grant you a loan at a much higher interest rate. This is because the chances of you repaying your debt are low. If you want to get a home loan and you’re blacklisted, there are a few things you can do:
Pay off all your outstanding accounts: Paying off what’s left of your debts is the first step to getting a bad credit home loan. This will show banks that you’ve taken steps to improve your financial situation.
Get someone else to co-sign the bond with you: If you have no credit history, or if your credit history is bad, it may help to have someone co-sign the bond with you. This person will be held liable for unpaid installments if you fail to meet the terms of the agreement.
Make your rent or bond payments on time
It is still possible to get a home loan if you are blacklisted. However, you will need to apply for a bond through the special risk department of your chosen bank.
You can do this by calling directly or visiting your nearest branch. In most cases, the bank will use the same criteria as they would for any other home loan application, such as:
- Your credit score
- Your income or salary
- Whether or not you have any dependents
- Whether you own your own home already
- How many cars you own
Make sure that before you apply for a second bond, you check that you qualify for it. If there are any outstanding debts on your credit file, these will need to be settled before the banks will consider your application.
The best way to make sure that you are accepted for a home loan is to ensure that all of your payments come out on time. This includes things like rent and electricity bills. If these are not up to date then your application will probably be denied. The same thing applies if there is any existing debt on your account, so make sure that you pay off your credit card regularly, if possible.
Shop around and look for home loan lenders that offer loans to people with bad credit.
The fact that you are blacklisted does not automatically mean that you cannot get a home loan.
Shop around and look for home loan lenders that offer loans to people with bad credit. They will be able to give you a far better chance of getting a loan as they specialize in loans for people with bad credit.
While your chances of getting a loan might be higher, the interest rates will be far higher than for someone with good credit, so it is important that you do not apply for more than you can afford or will have trouble paying back.
Banks like Absa, Standard Bank and FNB all offer loans to those with bad credit but make sure that the loan you apply for is from one of these banks.
You should also try to pay off some of your existing debt before applying for a new loan as this will help improve your chances of getting a loan even if it is just slightly.
Inquire about a secured loan
If your credit isn’t very good, then it is likely that many lenders will deny your application for a home loan. However, if you have some equity in your home and can offer it as collateral, then your chances of getting a home loan may improve. Some banks allow their customers to use their savings account as collateral and this can help them to secure a reduced interest rate on the loan.
Offer a deposit or collateral.
This is one of the quickest ways to get around your blacklisting problem. By offering a deposit or some collateral, it will show the bank that you are serious about getting the loan and that you want to do everything possible to secure it. Deposit money into your account on a regular basis so that the bank knows you are serious about saving money too.
Get someone else to sign as surety for you. If you have someone who is willing to sign as surety for your loan, then this will help your chances of getting a loan. The bank will still need to check their credit rating and ensure that they are not blacklisted themselves, but if they are clear then this could help both of your applications.
Conclusion
In short, if you are blacklisted the first thing that you should do is to get your finances back in order—keep in mind that home loans are long-term loans and it will take some time before you can improve your credit score. Once you have done this you can then begin improving your chances of getting a home loan. Making sure that your bank accounts are linked, having a good credit report and a high income are all the things which help you to get a home loan when you are blacklisted.
