Obtaining a home loan after a Part IX debt agreement

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Kevin
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Joined: Mon Aug 12, 2019 7:49 pm

Obtaining a home loan after a Part IX debt agreement

Postby Kevin » Mon Aug 12, 2019 7:52 pm

I had trouble with my debts and had no choice but to enter into a Part IX Debt Agreement 2 years ago, after advice from my financial counsellor. The saving grace for me was that I had a promotion in my current job, and was able to clear my debt quickly. I am now debt-free and have learnt my lesson and started properly managing my finances and saving up as well.

How can I move forward with obtaining a home loan after a Part IX debt agreement?

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Otto Dargan
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Re: Obtaining a home loan after a Part IX debt agreement

Postby Otto Dargan » Mon Aug 12, 2019 8:00 pm

Hi Kevin,

Welcome to the forums and thank you for reaching out to us.

Prime lenders are very cautious when it comes to lending to borrowers who are under part 9 debt agreement because it shows that they cannot manage your finances properly and might have higher chances of defaulting.

However, you can move forward with getting a home loan from specialist lenders after completing a part 9 debt agreement under the following circumstances:

  • Provide a valid reason for being in the debt agreement
  • You have completed the agreement more than 12 months ago
  • You are borrowing less than 80% of the property value.
  • There are no further credit issues besides the part 9 debt agreement that will remain in your credit file for more than 5 years.
  • You have made rent repayments on time
  • You must have at least 16% of the purchase price as a deposit.

Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a home loan.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Kevin
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Joined: Mon Aug 12, 2019 7:49 pm

Re: Obtaining a home loan after a Part IX debt agreement

Postby Kevin » Mon Aug 12, 2019 8:19 pm

Thanks for the quick reply. Why do I need to show such a high deposit amount?

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Otto Dargan
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Re: Obtaining a home loan after a Part IX debt agreement

Postby Otto Dargan » Mon Aug 12, 2019 8:22 pm

Hi Kevin,

Having a larger deposit means the lender will be taking less risk when taking on your home loan. It shows to the borrower that your past issues are behind you and you’ve saved up a deposit. However, the main reason is when you’re borrowing over 90%, most applications have to go through the mortgage insurer who are much stricter than banks.

The more amount you put down as a deposit, the less you'll borrow, meaning you'll pay less interest over the life of your loan. You would also be providing evidence to the lender that you have steady income flow and genuine savings, which would help in getting your loan approved, as the lender would be assured that you'd have means to pay off the loan.

Furthermore, if you borrow up to 80% of property value, you would be saving thousands by not having to pay Lenders Mortgage Insurance.
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Kevin
Posts: 3
Joined: Mon Aug 12, 2019 7:49 pm

Re: Obtaining a home loan after a Part IX debt agreement

Postby Kevin » Mon Aug 12, 2019 8:35 pm

Thanks for the clarification. I also read about First Home Owners Grant.
I am looking to buy a home in QLD valued at around $670,000.
When will the grant be paid?

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Otto Dargan
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Re: Obtaining a home loan after a Part IX debt agreement

Postby Otto Dargan » Mon Aug 12, 2019 8:38 pm

Hi Kevin,

The first home owners grant is available to people buying or building their first home. You can apply for the grant as soon as you provide a copy of the registration confirmation statement showing the name of the title of the property. The grant is paid at settlement.

If you're living in a brand new home in QLD, the grant amounts to $15,000. Please note that the grant is not available for established homes.

Also note that there is a list of documents that you require for FHOG which including contract of sale, certified ID, and additional supporting documents.

Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a home loan.
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts


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