Hi everyone, my name is David. Im new to this forum, and to property in general.
My wife and I have recently decided to take the first home buying plunge (at 39 and 43 respectively!) but have come across a serious hurdle: I have a bad credit mark against my name from 2013. It’s an outstanding credit card debt, which had gone into default, and which I’ve just paid.
I’ve spoken to my mortgage broker who has advised that we might only be able to get a “3rd tier bank” loan. Specifically he mentioned Peppers. My research so far has revealed their interest rates are very high, which I was advised (by my broker) would be the case: because we’re a “higher risk”.
We are both casually employed in the arts industry, but consistently earn roughly 55-75K per annum. We have a great savings history, and no other defaults, we pay all of our bills, rent, etc on time. We also have close to 20% deposit (which depends on the size of the mortgage required, which depends on the property price). Essentially, aside from the one black X on my credit file, we’re a good risk!
We have a property in mind, which we really, really want, that goes to auction on June 18.
My questions are:
Should we consider a loan from one of the few companies that would deal with clients like us? And who, of those, would you recommend?
Should we hold off entirely from buying until the black mark gets wiped from my credit history, in 2018?
Should we hold off considering the current property jitters and future outlook?
I’ve searched these forums, and the net in general, and Peppers gets pretty good customer reviews (for all of their loan products), but also had a lot of complaints (mostly customer service related). Confusing!
So, in summing up, we’re really wanting to buy this house, but I don’t want to make a bad decision. We’re not desperate. Well, kind of!
Thanks for reading, and for any advice.
Regards,
David
You can always refinance once your bad record is wiped out :).
Hi Deedee,
Just a thought out of left field – I think I have heard of some groups that can help you clear your credit file. Maybe worth checking (googling?) to find one of these? Sorry I can’t add more – but I thought I recalled reading of such firms a few years back….Since the debt has been repaid without discounting (assumedly) you might have a good chance,
Benny
How much is the credit card default?
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
I wouldn’t worry too much. If you’ve shown commitment to repaying it (not just putting it in the “I don’t care about it” pile), lenders will consider you with a good explanation as to why it occurred in the first place. Showing you’ve paid it off, saved in the meantime, no other defaults for the last 3 years, stability in employment and residence, you should be able to get through. Third tier lenders can charge higher interest rates, with refinancing later on drawing a “Who else would lend to them?” kind of reaction from the incoming lender.
Find yourself a good broker who wants the deal, can push it through, and can find other positives with your history and credit worthiness, not just the one blemish that exists on most people’s files, anyway.
I had the same problem. For a short period of time I was semi-employed. Made sure the mortgage was paid first, credit cards last, which means I defaulted on an $800 debt. I thought it was no big deal at the time. I paid out the $800 debt plus all their stupid money making fees, but I was still left with a black mark on VEDA.
Credit Repair Australia managed to have the black mark removed. Not cheap. Cost me over $2000, but will allow me to get a cheaper interest rate. Which means I save $2000 in interest in 18 months. Plus it allows me to buy another property, which means more capital gain. So it’s expensive to NOT fork out the $2000. They have a no win/no pay policy. Might be an idea to give them a call?
Pete
You must be logged in to reply to this topic. If you don't have an account, you can register here.
