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Part 9 Debt Agreement Home Loan

Am I eligible for a home loan?

Yes, you can qualify for a home loan once you have finished your Part IX agreement!

  • You can borrow up to 90% of the property value.
  • You must have around 16% of the purchase price as a deposit.
  • If you have a larger deposit then you may qualify for standard bank interest rates.
  • If you haven’t finished paying off your Part IX debt agreement then you can’t qualify for a home loan.

Our mortgage brokers are specialists in home loans for people with impaired credit.

Please complete 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.

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.

  • Christina

    Hi, I’m in a Part 9 agreement due to some unforeseen circumstances. It is mentioned that refinance of the current mortgage is possible if one’s still in the agreement, and I’m interested in that. Adding, I want some cash-out as well is this possible or not?

  • Hi Christina, there are some lenders that would accept a refinance of a current mortgage while you are on a Part IX Debt Agreement. As such loan is very high risk for the lender, the only cash out you could get is releasing equity to pay out your Part IX.

  • Bianca

    My husband owns a property which is valued at $460,000 and I want to buy in to be on the title but I was discharged from a Part IX agreement 3 years ago. He only owes $250,000 and he’s got clear credit. Can you help? What will my rate be?

  • Hi Bianca, in most states, you can be added to the property title of your partner’s property and stamp duty is waived, so that’s a good thing. Check with your conveyancer / solicitor / state government to be sure.

    As you’ve got a lot of equity and your Part IX was finalised a long time ago, we can get you approved with a prime lender at a great rate. Likely just below 4%, which may be lower than your husband’s current home loan! Give us a call on 1300 889 743 to discuss.

  • Rachel CJ

    I have completed a Part 9 personal insolvency agreement three months ago. All my debts are paid off and now I’m looking to renovate the home I’m living in. We owe $320,000 and our property is worth $550,000.

  • Hi Rachel, that should be fine. It depends on how much you intend to spend on your renovations and if they are structural e.g. adding rooms / knocking down walls, or non-structural e.g. kitchen, bathroom, sanding floors, painting. As a general rule, if you borrow less than 80% of the property value, you’ll get an amazing rate. Also, if one of you have clear credit then that will help us to get you a better deal.

    Call us on 1300 889 743 and we can work out what you are eligible for. Good luck with your renos!

  • Galvan, R

    Hi there, I’ve finished paying off a part 9 debt agreement and I’ll have roughly $20,000 within 6-7 months in the future. I’m just enquiring whether it is still a possibility to buy a property with a guarantor? It says that the debt agreement will be on my record till 2019 but I’m now saving enough money to buy a house fairly easily.

  • Hey Galvan,

    In some cases, it’s possible to buy a property with little to no deposit as long as you have a guarantor that owns real estate in Australia who can guarantee your loan. There are quite a few conditions on this:
    – In most cases, the guarantor must be working (i.e. not retired),
    – You must have some savings or a good rental history to show evidence that you can pay the loan.

    Having $20k in savings is great proof that you’re back on your feet and can manage your money. Give us a call on 1300 889 743 and we can discuss in more detail.

  • Danielle

    Hi there. I have just paid out a part 9 debt agreement. I have good income and have saved approximately $35000. Am I eligible to apply for a home loan with any lenders

  • Hi Danielle,

    Well done on saving so much! Your deposit needs to be 10% to 14% of the purchase price depending on if you’re a first home buyer and where in Australia you are buying (which state). For example in QLD the grant is $20,000 in some cases so a smaller deposit is needed than in other states.

    I’d say a little more of a deposit may be required in some states. It just depends on how much you want to buy a house for. Please call us on 1300 889 743 and ask for a bad credit specialist broker.

  • Emma

    Hi there, We have been living in WA Australia for 4yrs. We have excellent credit here. I entered into a NAP in NZ over a year ago and was discharged a few months ago. We can’t seem to get a straight answer as to how this affects us applying for a home loan next year and how much deposit we would need. One broker told us they couldn’t help us as they thought it was similar to a part ix …… so confused !

  • Hi Emma,

    Some of our lenders check your credit history in NZ however there are quite a few that ask you about your Australian credit history only. Veda Advantage is the company that holds everyone’s credit file and they operate in both NZ and Aus. The lender can search both if they want, but many of them don’t.

    In other words you’re in luck! Contact us on 1300 889 743 and one of our brokers can help you to get approved at a great interest rate. Or fill in our free assessment form and we’ll call you tomorrow. https://www.homeloanexperts.com.au/free-quote/