Debt

I have a few debts with baycorp. But i want to buy a house in a couple of years, if i pay baycorp, how will that effect it? Does anyone know?

If you want a mortgage, the debts usually must be paid before they'll give you approval. They stay on your record for 7 years and then disappear, paid or not. Some banks won't touch you if you've had stuff with Baycorp (e.g. Westpac) even if they've been paid but others look at this history behind it, how long ago, whether it's paid etc. They also seem to look a little kinder when you've got some form of deposit or savings, even a minimal sum.

Im wondering this because both DH and i have 1 mark against our names from when he had his accident but they are paid...

Im just worried that it wont matter to the bank and they will still say no! im also worried that they will be weary as it was only a few years ago

aaarrrggghhh!!! the lesson is to make sure we stay out of trouble i guess!

yeah they are held on file for 7 years.. yip all banks etc can see these files..

as everyone has said just keep a good savings record up and i am sure it will be fine.. some banks won't go near it but then you will find some that will..

good luck

yup my DH had a debt on his rating that we knew nothing about! so i rung that company and they had no record of why it was lodged so it was removed! (as it blimmin should be!) BUT i had to ring them 3 times to get them to sort it out!

I have just rung the bank we are trying to get home loan with and she said that i have to write a letter with proof of why we defaulted which is no probs and then they will review.

She also said "as long as there isnt too many and spanning over a long time then banks may consider"

Edited by BaileyandAstin

A year ago I worked with a guy who had just sold his Mike Pero mortgage brokership and he said the banks were all competing with each other to lend money so as long as debts could be explained they were ok.

For example, you thought you cancelled SKY TV/GYM membership and had paid everything up but got a bill and you had moved house so didn't receive it so it was sent to Baycorp. You didn't know about this debt until you applied for the mortgage. You can explain the reason for the debt, intend to pay or dispute the debt, and the banks are happy and approve your mortgage. Apparently this happens a lot.

Or - you ran up some debts in your younger days (last year), have sorted yourself out, cleared the debts, built up some savings and turned over a new leaf.

He said the people that got declined generally had no deposit and lots of debts and wanted to borrow enough to buy a house on 100% finance plus clear all their debts. The banks have no assets to chase if you default so generally decline.

His advise was clear your debts, stay within your (low) credit card and overdraft limits and establish a good savings pattern (regular money going into a separate savings account will do it).

jaz wrote: He said the people that got declined generally had no deposit and lots of debts and wanted to borrow enough to buy a house on 100% finance plus clear all their debts. The banks have no assets to chase if you default so generally decline. ).

this is probably a stupid question but do assets make a huge difference to the outcome??? We only have $19,000 assets which is apparently quite low

We're in the process of buying a house (putting an offer in today!) and we had nowhere near 10%. We're just under 5% actually. There are more conditions if you're borrowing more than 95% of the price, like a low equity fee (ours varied between $1500 and $5000 depending on bank), other conditions like we have to pay off our car debt. But all 4 major banks that our broker approached were more than happy to give us a mortgage for between $380000-$440000 (of course how much they will give you depends on your incomes). Our assests aren't huge either.

10% deposit would be great, but for us there was no way we were going to get near that for another 5-10 years!