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  • Profile photo of ChrisChris
    Join Date: 2018
    Post Count: 2

    Hi Everyone.
    I have just finished 0-130 and have realized that this i more then likely the path for me. However i dont know what i should do first. Me and my partner currently make $70k per year net income in our business and have possibilities to grow that more. But we have about $60,000 in consumer debt. Our plan was to pay off the debt in 2 years then save for a deposit.
    we are currently paying an extra $500 – $1000 on the debt each month to get rid of it.
    Should i continue this approach, knowing that it will be a 4 year time frame before we can purchase. Or should we save all of that extra money and consolidate our debts into a home loan.

    Regards Chris. Central Coast NSW

    Thank you.

    Profile photo of TerrywTerryw
    Join Date: 2001
    Post Count: 16,110

    First probably find out if you have a choice. See a broker and see if you have any borrowing capacity while you have the debt in place and then compare to as if you had no debt.

    Then consider what you should do. I would probably advise to pay off the debt first, but I don’t know much about your situation,

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide)

    Profile photo of Richard TaylorRichard Taylor
    Join Date: 2003
    Post Count: 11,992

    Hi Chris

    Firstly welcome aboard and hope you enjoy your time with us.

    0-130 is a great read especially as you start out but I think even Steve would agree that those strategies that applied when the book was first written have changed considerably over the years.

    Regretfully even with the strongest will in the world no lender will allow you to roll your personal debt into your home loan and you will need a deposit of in excess of 5% of the purchase price. I would strongly suggest you focus on paying down this consumer debt even if means refinancing to a lower rate Some low interest rate or interest free credit cards still exist so this might be worth looking.

    Good luck with your business and your home ownership ambitions.


    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of ChrisChris
    Join Date: 2018
    Post Count: 2

    Thank you for the advice. I do agree with the you all that i need to pay off the debt first in order to save the deposit. This will also allow me to purchase with less risk which was what i wanted to do. I will continue to pay the debt since i will have it clear in less then 24 months. this also means i can save about $60,000 in the next 2 years after the debt is gone. However i am a bit nervous that 4 years is to long to wait.


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