Category Archives: Large Debts

Can I Still Get a Mortgage If I Have Debt?

In a word – yes! This article will give you an understanding of how the banks take debt into consideration when reviewing a mortgage application, as well as information on the other lending avenues out there. The best option for you depends entirely on your personal circumstances. Contact us for a free consultation. We will give you advice and support specific to your situation.

How do the banks view debt when considering a mortgage application?

When reviewing a mortgage application, the banks look at three things relating to debt:

  • Current debt
  • Liability
  • Credit score

Current debt

First, they will deduct any loan payments when calculating your income. Let’s say you have an income of $50,000 per annum after tax. You also have loan repayments totalling $10,000 per annum. The bank will reduce your calculated income to $40,000. Sometimes, if the loan amounts and types show a pattern of ‘reckless’ spending, the bank may consider whether the applicant is going to responsibly manage the financial obligations of a mortgage

Does the bank care about big student loans?

When it comes to student debt, the banks aren’t usually concerned by the amount. This is because the loan repayments are always based on the person’s income, not how much is owed. And student debt is considered ‘good’ in that it likely has improved the person’s earning prospects in the long run. Given that some professions require students to go into debt in the hundreds of thousands, this is a big relief for many prospective homeowners!

Does the bank care about loans that are nearly paid off?

It’s important to be aware that the bank doesn’t look at when the term of a loan is up. If you’re a couple of months away from paying off your car loan at the time of applying, the bank won’t take that into account. Instead, they’ll calculate your income as if you are making those loan payments for the foreseeable future. For this reason, it can sometimes be a good strategic move to pay off a debt sooner. That would mean however that you’re likely to reduce your deposit, so it’s a bit of a balancing act. We can help you decide what the best move is for you.

Liability

Liability refers to any credit card or overdraft limits. When it comes to credit cards and overdrafts, the bank doesn’t look at how much you currently owe. Instead, they will calculate your debt using the assumption that you will spend up to your credit card and overdraft limits. So, a great first step to getting your finances in order is always to reduce your limits down as much as possible. This will increase your “income” as the bank sees it.

Credit score

Finally, they will look at your credit score. This will reflect any “bad debt” you may have. Generally speaking, bad debt means late or missed payments for loans and bills, tax debts and defaults and bankruptcy. You may not be aware that credit inquiries also reduce your credit score. Every time you apply for a hire purchase scheme or credit card etc your credit gets checked, impacting your score.

Can I Still Get a Mortgage If I Have Debt

What are my options when my mortgage application is declined by the banks?

It can be really disheartening if you get your mortgage application declined due to bad credit. You may have tidied up your finances and be in a secure financial position but due to your credit history the bank won’t lend to you. This is where non-bank lenders are a great option. We’re not talking about those shady finance companies that charge 8% interest per week and encourage you to go into debt for a holiday or a flash car. Non-bank mortgage lenders fill an important space. They provide loans to people who can afford a mortgage but aren’t able to get a loan with a bank.

Why can non-bank lenders give me a mortgage when the banks won’t?

They can approve mortgage applications that the banks have deemed too risky. To enable them to take risks, they charge a higher interest rate than the banks. This isn’t something to fear, you just need to factor the cost into your budget. It’s the price to get you into the property market now and secure a big asset for your future. They’re a great short-term solution to get into your own home. The key thing is to go in with a plan to get your finances tidied up to the point you can go to a bank within a couple of years.

We love supporting clients into their first home through a non-bank lender – and then helping them into a mortgage with a bank a year or so later. Once our clients have a mortgage with a bank (and therefore lower interest rates) we encourage them to continue to make the same payments as when they were paying more interest. This means their mortgage gets paid down faster and saves them huge money in the long run than if they’d just been making the minimum payments.

So there you have it, you can get a mortgage with debt or bad credit

Don’t assume a mortgage isn’t possible for you in your current circumstances. The key thing is to get expert advice to understand your options and maximise your chance of your application being approved. Platinum Mortgages specialises in solutions for people who have been declined by the banks. If there is a way, we will find it for you. We’re here for you for the long term, from helping you put a plan in place to get a mortgage, managing the loan process for you, getting you the best mortgage and mortgage structure, and managing your mortgages throughout your lifetime. We love seeing our client’s financial situations improve with our help, securing their future and a place to call their own.

What Is The Smartest Way To Consolidate Debt?

Do you want to consolidate debt and do so smartly? Most people have some form of debt, whether that be from credit cards, bank loans, home loans, or more. So, if you’re worried about your debt piling up, debt consolidation can be a good option.

However, if this is unfamiliar territory, you may be confused about how to get the process started. Don’t worry, when you work with a Mortgage Adviser / Mortgage Broker, the process becomes much more manageable.

What Is Debt Consolidation?

When you choose to consolidate your debt, you combine multiple individual loans into a single loan. By doing this, instead of paying off many different debts with varying interest rates, you can focus on paying off one loan with a set interest rate.

The resulting single obligation usually has a lower interest rate than the many prior debts. This means you’ll wind up paying back less money than you would have paid otherwise. Basically, by consolidating your debt, you save money and make things simpler.

When you choose to consolidate your debt, you will end up with a lower interest rate, reduced monthly payments, improved credit score and more. This is why it’s crucial to get an expert’s opinion and make the right decisions, so you can maximise your benefits and save money.

What Is The Best Way To Consolidate Debt?

What Is The Best Way To Consolidate Debt?

There are several different ways to consolidate your debt. However, the best option for you will depend on your situation. If you want to figure out the best strategy to deal with debt consolidation, speak with a knowledgeable Mortgage Adviser / Mortgage Broker.

Why Should I Work With A Mortgage Adviser / Mortgage Broker?

When you work with a Mortgage Adviser / Mortgage Broker, you work with an expert who knows precisely what they are doing. They will seek out the best lenders for your situation, walk you through the complicated process, and find you the best deal for your specific situation.

Platinum Mortgages’ skilled team of Mortgage Advisers / Mortgage Brokers are well-equiped to scrutinse every aspect of your financial situation. They make certain that the process goes down without a hitch.

If you want to save time, spend less money, deal with less stress and end up with the best deal available to you, you should work with a Mortgage Adviser / Mortgage Broker.

What Is The Smartest Debt Consolidation Option?

Overall, talking to a competent Mortgage Adviser / Mortgage Broker and getting an expert’s opinion, customised to your unique needs, is the smartest method to combine debt. At Platinum mortgages, we are here to help. Before you choose an option, talk to one of our specialists to figure out which choice is best for you.

Ready To Consolidate Your Debt?

At Platinum Mortgages, we assist New Zealanders to consolidate debt and find more affordable repayment options for their loans. So, if you want to know more about consolidation of debt, find out if it’s the right move for you. Alternatively, if you are ready to start now, contact us at 0800 536 346 for further information.

Don’t let your debt build up until you can no longer handle it; speak to us today and let us help you!

What Is Debt Consolidation And Why Is It Helpful?

Making your life easier through debt consolidation is the surest and easiest way to become debt-free faster. Moreover, combining multiple accounts into a single account simplifies management and saves time and money.

Debt Consolidation

Debt Consolidation is the process of combining previous debts with many lenders into a single loan. The result is one payment instead of many. This is helpful to manage multiple existing debts, because you make one payment at one rate. Furthermore it helps you to secure better credit by using a single lending company. In addition, this also gives you the flexibility to negotiate repayment terms and interest rates. Consequently it could often save you money in the long run, as you can avoid multiple high-interest accounts and payment dates. 

Consolidating debt is often a smart way to keep your credit line stable and get rid of various debt streams. When you combine your finances into an existing mortgage, you are effectively elevating yourself from high-interest loans that can negatively impact your credit rating. 

What Can I Consolidate?

The first question people ask is, what loans and debts can I consolidate? Although the answer varies depending on the lender, most reputable Financial Advisers can readily transfer your debts from:

  • Credit cards.
  • Debts on store credit cards.
  • Hire purchase loans.
  • Personal loans from finance companies and banks.
  • Student loans.
  • Tax arrears.
  • IRD payments.

While these are your traditional forms of debt, many companies also include medical debts and most payday loans. All you need to do is ask. If you are struggling with making multiple payments to several agencies, consolidating your finances will help you stay on top. With just one simple payment to make, you can effectively create a new budgeting plan that is designed to work for you.  

The Benefits

If you’re suffocating in high-interest loans and credit card repayments, debt consolidation could be the answer to reaching your financial independence. 

With competitive interest rates and a single payment system you can keep up with, consolidation is easily the best solution for your financial woes. Attaining a single loan doesn’t just improve your credit score, it will effectively:

  • Provide you with a lower interest rate that is spread over a more achievable length of time.
  • Make budgeting easier with only one payment to manage.
  • Provide you with lower monthly payments.
  • Allow for possible tax deductions.
  • Allow the equity of your home to lower your interest rates. 

Where Do I Consolidate My Debt?

Even if the banks say no, there are still an array of options available to best suit your needs. It is however important that you thoroughly think about your long term financial plans and how quickly you want to be out of debt.

The best way to figure out where you can consolidate your debt is by working with a reputable financial agency. An experienced Financial Adviser will explore the variety of consolidation channels available to you and present you with the best options to suit your needs. Professional Advisers can secure you a competitive interest rate. They also help you avoid unnecessary costs such as fees for transferring your funds from credit cards and hire purchases. Enlisting in the expertise of a professional Financial Adviser will ensure you are provided with accurate figures and up-to-date advice, greatly benefiting the flexibility of interest rates and your repayment options.

We Are Here To Help

The team at Platinum Mortgages can offer you a complete debt consolidation solution. With leading market rates on all debts transferred and comprehensive consolidation services, our team of professional Financial Advisers can help you combine your outstanding debts into one easy to manage loan. Get in touch today so we can provide you with the right advice for managing your outstanding finances.

4 Non Bank Lender Advantages Over Mainstream Banks

Are you planning to buy your first home or a new investment property and wondering if there are alternatives or advantages to mainstream banks, such as non bank lenders? You might assume that your only option for a home loan is to go to a bank. Non-bank lenders can be a more viable alternative than you might think.

Non-bank lenders have increased competition in the mortgage industry. They have given homebuyers more options when it comes to getting the right loan for your needs.

4 Advantages of Getting a Home Loan From Non-Bank Lenders

What Is A Non-Bank Lender?

The term ‘non-bank lending’ refers to any lender who provides finance but isn’t a traditional, registered bank such as ANZ, ASB, BNZ and many more.

The Benefits of Getting a Home Loan From a Non-Bank Lender

Many non-bank lenders are well-established institutions. Non-bank lending can even offer you advantages over taking out a home loan through a bank. These benefits include:

Start-Up And Business Friendly

Banks often refer business owners to a specific business banking department. Their role is to understand your company and provide you with the lending you require. However many of these business bankers often end up being more a hindrance than a help.

It’s not uncommon for bankers to ask for business financials, budgets, projections and plans. This information is not always available to you as the client, when you need it. Platinum Mortgages can help you draw up a suitable plan, to get approved for the loan you need for your business.

More Flexible Criteria

If your credit is poor you know that you would most likely be rejected for a home loan by a bank. This is when non-bank lending may be a great alternative. Non-bank home loans usually have less restrictive financial criteria for potential borrowers. This also makes them useful if you cannot immediately demonstrate to a bank that you have the income level they demand.

If you have a default on your credit report, a bank will often dismiss you as a bad credit risk and decline your application outright. However, an experienced non-bank broker will take the time to understand your problem. They will present a plan to your lender to get your loan approved.

Lower Deposits

Banks usually require a deposit of 20% on a home loan. As house prices in New Zealand continue to rise, the deposit requirements rise as well. Consequently, getting onto the property ladder can seem like an impossible dream. This applies to most people, whether you , first-time home buyers, new immigrants, or anyone who has suffered a recent loss in equity.

However, the competition between banks and non-bank lenders and the greater flexibility offered by non-bank lending, means that they usually have lower deposit requirements than banks.

As a result, non-bank lenders have made home loans far more accessible for first-time buyers and others who may be turned away from traditional bank loans.

Non-Bank Lender

Specialist Knowledge

Because they’re subject to less regulation than a bank, non-bank lenders can offer more personalised customer service. Many focus on a niche product rather than a range of different services as well. This focus means that they often have specialist knowledge about a particular area, like the housing market.

Choosing non-bank lending for your home loan means that your Mortgage Adviser can often guide you through a more comprehensive array of options than you might get at a bank. Their expertise can help connect you with the best mortgage for your unique situation.

Buying a home can be one of the most significant investments you ever make. A Mortgage Broker from Platinum Mortgages, can give you expert advice on non-bank lending and help you find the best home loan for your needs. Get in touch with us at 0800 536 346.