Securing a home mortgage loan with bad credit may seem challenging, but with the right guidance and strategies, homeownership remains attainable.

Navigating Options for Bad Credit Mortgage Loans

Subprime Mortgages

In the subject of bad credit mortgage loans, subprime mortgages offer a pathway for individuals with less-than-ideal credit scores. Greystone Advisory’s expertise ensures borrowers can explore this option with clarity and confidence.

Subprime Mortgages

FHA Loans

Backed by the Federal Housing Administration, FHA loans present a viable solution for those with lower credit scores. Greystone Advisory guides individuals through the nuances of FHA loans, ensuring they leverage this resource effectively.

Co-Signer Assistance

Engaging a co-signer with a stronger credit profile can significantly enhance eligibility. Greystone Advisory provides insights into the co-signing process, fostering collaboration between borrowers and their chosen co-signers.

Optimizing Down Payments

Greystone Advisory emphasizes the impact of a larger down payment on bad credit mortgage loans. By working closely with borrowers, the team ensures that clients understand the advantages of a substantial upfront payment.

Credit Score Improvement

Recognizing the importance of a healthy credit score, Greystone Advisory encourages clients to take proactive measures to improve their creditworthiness. This may involve addressing outstanding debts and rectifying any inaccuracies on credit reports.

Credit Score Improvement

Your credit score serves as a crucial metric evaluated by financial institutions, influencing your eligibility for mortgages, loans, and credit cards. In Singapore, credit reporting agencies such as Credit Bureau Singapore (CBS) meticulously compile your credit risk profile, considering factors from the preceding 12 months. Greystone Advisory acknowledges the significance of comprehending what constitutes a poor credit score and its implications on financial opportunities.

The credit risk profile constructed by CBS encompasses various elements, including the extent of your indebtedness, spending patterns, recent credit applications, punctuality in loan repayments, credit history duration, and available credit. CBS translates this financial behaviour into a credit score, ranging between 1,000 and 2,000, with 1,000 denoting the lowest credit rating. Unfortunately, the precise methodologies and algorithms employed by CBS to calculate credit scores remain undisclosed.

It’s crucial to recognise that your credit score reflects not only your capability to repay a loan but also your reputation for meeting financial obligations. A low credit score can result from a history of late or missed repayments, excessive credit card usage, reaching credit limits, numerous credit applications in a brief period, and a high debt-to-income ratio, irrespective of your income.

Greystone Advisory encourages individuals to initiate their financial journey by checking their credit score with CBS to gain insights into their current standing.

How Does a Bad Credit Score Affect Your Mortgage Loan Application?

Securing a mortgage with a bad credit score poses considerable challenges and financial implications. A deficient credit history diminishes the likelihood of obtaining a mortgage on favourable terms.

Individuals with bad credit histories often encounter difficulties in obtaining a home loan, leading to less favourable conditions. The corollary is higher interest rates, reflective of the perceived risk associated with borrowers having less-than-stellar credit. This elevated interest rate persists until the credit score undergoes improvement or market dynamics allow for a reduction.

In essence, bank-issued home loans entail a lock-in period ranging from 2 to 3 years. Subsequent to this lock-in period, interest rates usually increase, prompting consumers to consider refinancing to secure a more favourable home loan package.

How to Check Your Credit Score For Mortgage Loans?

To gauge your creditworthiness for real estate or mortgage loans, consider the following steps:

Retrieve Your Credit Report

Obtain your credit report from established credit bureaus like Experian or Equifax. Review it for accuracy and identify areas that may need improvement.

Leverage Online Tools

Various online platforms offer tools to check your credit score. Greystone Advisory often recommends utilising these resources to clients, providing valuable insights into their credit health.

By staying informed about your credit score, you empower yourself to make judicious decisions, enhancing your eligibility for mortgage loans, even in the context of bad credit mortgage loans.

5 Tips to Rebuild Your Bad Credit Score for Easier Access to Mortgage Loans

Securing mortgage loans becomes a challenging endeavour with a history of bad credit. However, with strategic steps, individuals in Singapore can rebuild their creditworthiness, improving their chances of obtaining favourable terms for mortgage loans, even those designated as bad credit mortgage loans.

Understand Your Credit Report

Start by obtaining a copy of your credit report from reputable agencies like Experian or Equifax. Analyse the report thoroughly, identifying any inaccuracies or discrepancies. Understanding the factors influencing your bad credit score lays the foundation for targeted improvement.

Create a Realistic Budget

Establish a comprehensive budget that prioritises debt repayment. Allocate funds to settle outstanding debts, focusing on high-interest loans first. A disciplined approach to budgeting aids in timely payments, positively impacting your credit score over time.

Timely Bill Payments

Consistent and punctual bill payments contribute significantly to credit score rehabilitation. Ensure that utility bills, credit card payments, and other financial obligations are met promptly. This showcases responsible financial behaviour, gradually rebuilding trust with lenders.

Explore Secured Credit Options

Consider secured credit cards or loans, where collateral mitigates the risk for lenders. Timely repayments on secured credit contribute positively to your credit history, demonstrating financial responsibility and improving your creditworthiness over time.

Seek Professional Guidance

Engage with reputable financial advisors or credit counselling services. Professionals can offer tailored advice based on your specific situation, providing insights into effective debt management and credit score improvement strategies.

Rebuilding a bad credit score is a gradual process that demands commitment and strategic financial management. By diligently following these five tips, individuals in Singapore can enhance their creditworthiness, making the prospect of obtaining mortgage loans, including those tailored for bad credit, more attainable.

Situation 1	BANK’S REPOSSESSION
Deal Type	Refinancing with Fresh Cash-Out
Property	3 Bedroom Condo along Meyer Road
Property Value	$3.2M
New Loan Amount	$2.4M (with fresh cash-out of $500K)
LTV	75%
Synopsis	Customer, age 51, a senior marketing director in the food logistics industry, was being retrenched in August last year without any prior notice. With his wife being a full-time homemaker, he found himself soon having difficulties in servicing his mortgage repayments, resulting in the bank taking steps to repossess the property for a mortgagee sale within a short span of 6 months. Despite only having a $1.4M outstanding mortgage with $600K of CPF usage, the bank was unable to grant him additional cash-out facilities to tide him through this challenging period, as he couldn’t pass the 55% TDSR threshold in the absence of regular reported income.
Solution (1)	Luckily, the customer managed to find us in time and we eventually saved his house from being repossessed. Arranged our private property lender to grant a $2.4M mortgage loan, out of which $1.4M to redeem his existing mortgage, $600K to refund to CPF with remaining $400K fresh term loan for his personal use, which includes servicing of the monthly instalments with the new private lender.
Solution (2)	The customer managed to find a new employment sometime in March this year. We had since successfully helped the customer to refinance the $2.4M from the private lender sometime in September this year.

Situation 3	INHERITANCE DISPUTES
Deal Type	To finance purchase of sibling’s share in the property
Property	Sem-Detached house along Jalan Seaview
Property Value	$$7.5M
New Loan Amount	$2.8M
LTV	37.5%
Synopsis	Customer, age 62, had jointly inherited the above fully-paid property together with his sister when their father passed away sometime in June last year. Both siblings were at constant disagreements regarding the sale of the property. Customer had always wanted to keep the property for future capital appreciation and his sister was in favour of selling the property so that she could use the sales proceeds to fund her new condo purchase.
Solution (1)	Unable to reach a consensus, the Customer then wanted to buy over his sister 50% equity stakes in the property (valued at $3.75M). Customer was unable get the bank to finance his part purchase exercise as he cannot meet the TDSR requirement and loan tenure. We then managed to get our private lender to finance his purchase of his sister’s share with a $2.8M loan (with a 75% LTV against the $3.75M purchase price)
Solution (2)	Separate financing had also been arranged for the remaining $950K cash difference (being the balance of the remaining 25% purchase price), which was secured by pledging part of Customer’s 50% stakes in the property as well.

Situation 2	BANKRUPTCY LAWSUIT
Deal Type	Refinancing with Fresh Cash-Out
Property Type	Detached House in Newton Area
Property Value	$14M
New Loan Amount	$10M
LTV	71.4%
Synopsis	Customer, age 72, was facing one of the biggest challenges as a veteran businessman, when one of his suppliers had filed a bankruptcy application against him (being the guarantor for his group of F&B companies). After successfully obtained the court judgement for a claim-sum of $1.9M, the customer was eventually given 2-month timeline to settle the payment, failing which he would be in imminent danger of being declared a bankrupt, thus crumbling his business empire which he had built for decades. Despite only having an outstanding mortgage of $7.5M (with a 53.5% LTV against its $14M valuation), no bank is willing to explore the fresh financing in view of his age and more importantly, the pending bankruptcy lawsuit.
Solution	Secured a $10M financing (@ 71.4% LTV from a non-bank lender, out of which $8.5M was to redeem his existing bank loan with another $1.9M to be earmarked to be paid to the supplier on the agreed deadline. Remaining $600K was disbursed to the Borrower for his personal use. With the payment made to the supplier and eventual complete withdrawal of the bankruptcy application, we have thus successfully helped our customer to avert the disaster of being made a bankrupt at this age and he can now refocus on rebuilding and restructuring his other business portfolio

Challenge 6	MULTI-PROPERTIES OWNER
Deal Type	Refinancing (with fresh cash-out)
Property	Good Class Bungalow (“GCB”) in Holland vicinity
Property Value	$70M
Existing Mortgage	$28M
New Loan Amount	$50M (with fresh $22M cash-out)
LTV	71.4%
Synopsis	At the age of 60, our borrower stood as a seasoned property investor with a remarkable portfolio of prestigious GCBs and luxurious Sentosa Bungalows. His journey was a testament to years of astute investment decisions. However, even a seasoned investor can face hurdles. Despite his impressive corporate and professional profile, the ever-evolving TDSR regulations had cast a shadow over his aspirations for further financial growth. His own bank had to adhere to these stringent regulations, leaving him unable to access additional facilities.
Solution	With determination and creativity, we set out to secure a $50 million mortgage loan from a non-bank lender. What made this solution stand out was the 18-month interest servicing repayment plan. Now equipped with fresh capital, our borrower could breathe new life into his retail business, expanding it like never before with a $22 million cash-out facility. But our assistance didn’t stop there. We successfully guided the borrower in refinancing the mortgage loan back to a local private bank just nine months after the initial disbursement. This win is a narrative of resilience and adaptability.

Challenge 3	POOR CREDIT GRADING
Deal Type	Refinancing with Fresh Cash-Out
Property	Bungalow in Katong
Property Value	$9M
Existing Loan	$5M
New Loan Amount	$7.5M (with fresh $2.5M Cash-Out)
LTV	83.3%
Synopsis	At 62 years old, our customer faced a roadblock. His aspirations for additional mortgage financing hit a snag as his bank hesitated due to both his age and an unfavorable “HH” credit bureau rating. This rating was a result of overdue credit card facilities amounting to a hefty $1.2 million.
Solution	With a determined spirit, we sought out an alternative path. Through our network of non-bank lenders, we secured a remarkable $7.5 million term loan facility. It was not just a financial transaction; it was a lifeline. The first step was to use $2.5 million of this fresh term loan to clear off the burdensome $1.2 million in overdue credit card facilities. It was a moment of relief, a chance to leave the past behind. But that was not all. The remaining funds were now at our customer’s disposal for personal investments, a fresh start to chase new dreams. This story encapsulates our commitment to finding solutions when doors seem closed. .

Challenge 2	NO INCOME
Deal Type	New Purchase
Property	Detached House in Frankel Estate
Property Value	$12.5M
New Loan Amount	$8.75M
LTV	70%
Synopsis	In the world of property investments, our customer was a seasoned veteran. However, a unique challenge presented itself when he decided to acquire a property, not in his own name but in the name of his 23-year-old grandson, then a budding undergraduate at NUS. The grand vision was clear, but there was a significant hurdle to overcome: the grandson’s limited income meant traditional banks were reluctant to finance the purchase.
Solution 1	We embarked on a journey to secure an $8.75 million mortgage loan from a non-bank lender, covering a substantial 70% of the property’s purchase price. The brilliance of this solution lay in its flexibility – there was no need for the grandson to provide extensive income proof.
Solution 2	Fast forward two years, and our dedication yielded results. We worked tirelessly to help the grandson in refinancing the original mortgage loan. This time, it was one of the local banks that welcomed the opportunity to collaborate. Through these combined efforts, we transformed a challenging situation into a remarkable success story. This case underscores our commitment to finding innovative solutions, ensuring that dreams can come true, regardless of the obstacles in the way.