Am I eligible for a home loan?
Yes, you can qualify for a home loan once you have finished your Part IX agreement!
However, if you haven’t finished paying off your Part IX debt agreement then you can’t qualify for a home loan.
What if I have a large deposit?
If you’re in a strong financial position then we may be able to help you to qualify with a major lender that’s more accepting of debt agreements.
To qualify for a major lender with a discounted interest rate you must:
- Borrow no more than 80% of the property value.
- Have a very good reason for getting into the Part 9 agreement.
- Have made all of your payments on time during the agreement.
- Have strong savings and an excellent employment history.
If you meet the above criteria then we may be able to help you get approval with one of the banks that we have made an agreement with. This means you’ll get market leading interest rates even though you have a bad credit history!
What if you don’t meet the above criteria? We can still apply with a specialist lender and help you to borrow up to 90% of the property value.
What if my credit file no longer shows my Part IX?
With some of our lenders, you can now apply for a standard mortgage at standard interest rates, but some lenders will still only lend you 80%!
Two of our lenders can consider a loan for up to 95% of the property value.
Please fill in our free assessment form or give us a call on 1300 889 743 and one of our mortgage brokers will let you know your options.
Will I qualify with a bank or a specialist lender?
If you’re currently in or have previously been in a Part 9 debt agreement then it’ll show up on your credit file and the banks are able to access this information when assessing your loan application.
A major bank can’t consider your loan application.
We have, however, made agreements with some of the smaller banks to consider people who:
- Have a very good reason for being in the debt agreement in the first place;
- Have completed the agreement more than 12 months ago; and
- Are borrowing less than 80% LVR (of the property value).
The reason must be substantial enough to justify the agreement – such as a major illness – otherwise the bank will simply decline your loan. You must also prove that after the agreement you have made all of your rent payments on time, have saved some money on your own and haven’t had any more credit issues.
Specialist lenders are more flexible in the way that they assess your loan. However, they’ll charge a higher interest rate to compensate for the higher risk of your loan.
Our mortgage brokers are specialists in home loans for people who have been in a Part IX Agreement. Please fill in our free assessment form or give us a call on 1300 889 743 and one of our mortgage brokers will let you know which lenders you can qualify with.
What if I’m still in a debt agreement?
If you’re currently in a Part IX or Part 9 Debt Agreement then we can refinance your current mortgage to pay out your agreement.
You can borrow up to 80% LVR (of the value of the property) if you’ve been in the agreement for at least 12 months and have made perfect repayments for the last six months.
You can obtain a home loan with a specialist lender, typically at 2% to 4% above the Bank Standard Variable rate.
You can’t get a home loan to purchase a property during a Part 9 Agreement.
Part X Personal Insolvency Agreement
If you’ve entered into a Part X or Part 10 Personal Insolvency Agreement then the same lending criteria will apply as if you had been in a Part 9 Debt Agreement.
Please refer to the lending guidelines listed above.
What should I know about the Part 9 debt agreement?
Individuals often enter into a debt agreement as an alternative to going bankrupt. This type of agreement makes it possible for people to overcome financial hardship that’s caused a default on loan repayments or fixed expenses.
Part 9 Debt Agreement is regulated by the Insolvency & Trustee Service of Australia (ITSA), a Federal Government body. Your name will be listed on the National Personal Insolvency Index (NPII) and won’t ever be removed.
Although the prime lenders are strict on lending money to borrowers who have been in a Part 9 Debt Agreement, there are specialist lenders who can consider your application if you’re borrowing no more than 80% of the property value.
Is there an advantage to the Part 9 agreement?
Compared to being bankrupt, the Part 9 debt agreement is far more flexible and allows the borrower to have a number of options including:
- Negotiating a system of periodic payments out of your salary which is set at a level that you can afford.
- Having a moratorium arranged which is a temporary suspension of paying your debt.
- A transfer of some of your property from you to your creditor in full or part payment of your debt.
- Having an agreement with your creditor to pay less than the full amount of the debt that you owe.
What do the banks think of a Part 9 debt agreement?
It’s very difficult for the major banks to approve a loan if they know that you’re under the part 9 debt agreement. This is because the prime lenders like to be very cautious when lending money to a borrower who has a bad credit history as they would be placing themselves in risk for approving a loan for a borrower who can’t make the repayments on time.
However, there are still ways around getting a loan approval for your situation!
There are specialist lenders who can consider your debt agreement when you apply for a mortgage. However, you must meet specific approval criteria.
Please fill in our free assessment form or give us a call on 1300 889 743 and one of our mortgage brokers will answer all of your queries.