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Go for non conforming loan or wait it out?

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Zaychri | 02 Aug 2015, 03:20 PM Agree 0
OK, ill cut a long story short...

I became a discharged bankrupt in April this year. During my bankruptcy, I made large contributions to repay my creditors, and I'm currently in arrangement with AFSA (Government body who looks after bankruptcy) to repay my total debts to creditors in full. When I went into bankruptcy I was drowning in debt but managed to gain a good paying job unfortunately 8 or 9 months after I declared it.

During that time I also managed to also save $40k. Now, I always knew it was a long shot, but, I spoke to a mortgage broker who told me I am able to get a home loan pre approval based on my deposit at an interest rate of 8.3%. Extremely high I know, but I saw this coming and was expecting this.

Now they said that I could refinance in 1 to 2 years time if I kept it all in order. A loan of 300k would work out to be about $440 a week which is quite high but would enable me to step back into the property market which I am an avid spectator of.

I am wanting to step back in as to not lose ground in the property market and also bank on some capital gain in the long term.

Or I could just not bother and wait it out until I am further out of my discharge and become less or a perceived risk to the banks and get better interest rates.

I am looking at an investment property not owner occupier.

Basically, I want to know, is it worth the pain of a higher interest rate or just wait and keep saving a deposit.

Please give me your thoughts.

Thanks
  • sherlock | 26 Sep 2015, 07:57 AM Agree 0
    Hi Zaychri

    8.30% seems quite high.

    The rate will depend on the overall LVR required - however I am confident you could secure a rate significantly lower than 8.30%.

    Anywhere from 5.99%-8.00% is achievable - again depends on LVR.

    What percentage of the purchase price does your $40,000 deposit represent?
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