Your Investment Property forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Go for non conforming loan or wait it out?

Notify me of new replies via email
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.

  • 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?
Post a reply