I Have a Default - Would Banks Lend me More Money?

Ldtwtl92 on 24/02/2018 - 16:48
Last edited 24/02/2018 - 17:32 by 1 other user

Hi everyone, it's my first time creating a forum topic, please be nice :D

I hit a stump 3 years ago and did not know how to create a budget for myself, so I did some serious damage on my credit card - which had a limit of 11k, I balance transferred to another bank and though I initially did pay off the first few months, I didn't make any other repayment because I was more focused on paying my mortgage. Mortgage repayments were/are $2500 per month (P&I). This led to a default which I have now repaid in full, the default clears in Nov, 2020.

I was wondering if anyone currently has a default and is looking to buy another property? Have you been successful in borrowing? My husband and I have more than enough for a deposit and stamp duty, but I am afraid to go to the bank unless there is a high chance that I can borrow.

Other important info:

  1. I have a 2yr old
  2. I have a full time job that makes 60k a year
  3. Hubby has his own business, so he has a director's income(based on yearly sale profit)+40k
  4. My current credit score is 517
  5. We own our cars out right
  6. Still have one credit card with 9k debt, which we intend to pay off by 2018 EOFY
  7. We've never made a late payment on our mortgage.
Financial Home Loan Loan Property

Comments

  • volcanoeqcycle on 24/02/2018 - 16:52
    +2

    I'd go and have a chat with a few lenders and see what they think about it before applying. There are some super helpful people who may be able to help.

    I wish you all the best in your endeavors.

    • dtwtl92 on 24/02/2018 - 16:54
      +2

      Thank you~ I've had a chat with ANZ, but I haven't really made further enquiries yet. The ANZ rep said to go to my current bank and ask if they are willing to lend more so that I don't have to go through a hefty paperwork process.

      • volcanoeqcycle on 24/02/2018 - 17:20
        +2

        That's the ticket, the more lenders you chat to the better idea you may get.

  • capslock on 24/02/2018 - 17:08
    +1

    The default by itself doesn’t automatically mean you will be rejected for a loan. It is one factor of many that the banks will consider.

    • dtwtl92 on 24/02/2018 - 17:45

      Thank you. Hopefully it is the case, should I wait until my rating is a little higher?

  • monkeybusiness on 24/02/2018 - 17:11
    +1

    Why have such high credit card debt? Do you not have a offset account on your mortgage that you can just use funds there to pay the card off? If you are going to owe the bank money, much better to do some from the mortgage than the credit card as the interest rates are a lot lower.

    • dtwtl92 on 24/02/2018 - 17:44

      We do have an offset account, that's where we have the funds where we have sufficient funds to be able to consider buying another property (20% deposit and stamp duty). Credit card debt was only recent (council rates, car insurance+rego+ctp for both cars) and there is no interest rate on that for 2months~

      • Quantumcat on 25/02/2018 - 11:32
        +1

        In that case you should be intending to pay it off in 2 months not by eofy

  • smuggler on 24/02/2018 - 18:09

    WHat on earth are you buying? Fancy clothes, $30 salads and jewellery?

    • dtwtl92 on 24/02/2018 - 18:12

      Credit card debt was only recent (council rates, car insurance+rego+ctp for both cars) and there is no interest rate on that for 2months - 55 days to be exact.

  • chumlee on 24/02/2018 - 19:01
    +2

    It shouldn't be a big issue considering it's a paid default, you have a deposit and property is secured but you are much better off paying off your credit card with your savings. Maybe even cancel the card

  • [Deactivated] on 26/02/2018 - 11:47

    in buying property, the loan is secured against the property, so its unlikely that the bank will ever lose money on it, so a paid default shouldn't stop you. You are considered a higher risk tho, so you might not get as good a deal as someone with no bad credit history. All depends on the lender. You may want to speak with a finance broker as they will have a good idea of which lenders are more lenient

  • Just Invest on 27/02/2018 - 17:12

    Wow everyone is offering very none-professional comments like they are the financial professionals…

    I am a mortgage broker and with your credit score of 517 and
    with default whether it is paid or not you will be rejected automatically 100% from the major banks once you submit the deal. They will not bother looking at the history of how default was made like… it was not a dodgy but was just a pure mistake…

    We have lenders specializing consumers with default (Pepper, Bluestone..) might be able to help you with those cases.

    Best advise is contact your local broker ASAP. And if they think they can go ahead with the major banks stay away from them and contact me. =)

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