Here's one for the mortgage brokers.
The Broker who can get me out of this mess will be my best freind for life :
Timeline
Nov 2007 - I took out a home loan with Homeside lending for $500K to purchase a property for $545. LVR was 91.7%.
Feb 2008 - I became concerned about rising interest rates and decided to fix my loan for 4 years at 8.29%.
Feb 2009 - I sold the property and tried to pay out my loan but was told the economic cost would be $80k!
Bank said "We're not going to let you sell this property unless you give us some security on this loan". They said I needed to have another property to switch the loan over to.
I told them I wasnt ready to purchase another property. So we came to an agreement ---> sell the property and throw the $500k into a Term Deposit which was going to act as security until I sorted myself out and found another property to buy.
Aug 2009 - I find a nice little house in Carindale, Brisbane. Asking price was $619K. Seller accepts offer of $615k.
I managed to save a deposit of $65k, plus I was going to take care of the Stamp Duty.
Where it gets interesting
- I go back to Homeside and tell them I've found a place to buy and I would like to use my existing mortgage of $500K, plus borrow an extra $50k. Plus I was putting in $65K.
- They do the sums and on the surface everything is hunky dory. Low expenses, great cashflow.
- 4 weeks later they come back to my mortgage broker and tell him that I have a $400 credit default against my name....listed with Veda Advantage.
To cut a long story short, I had two outstanding accounts with utility companies from a couple of years ago. I paid these accounts immediately as I did not want my property purchase jeprodised. They were genuine oversights.
The Clincher
- Homeside push my application to Genworth (their Lenders Mortgage Insurers) and they flat-out refuse to insure my mortgage because of the past credit defaults.
- so I tell my broker "they do know I already have the loan right?" He said yes, but that they don't care and there's nothing he can do.
- back and forth we go for days, trying to fight this....trying to get Homeside to swing some influence. Trying to get Genworth to see some common sense. We go all the way to the Homeside State Manager...but zilch...nothing.
Homeside tell me I either come up with the 20% deposit and avoid LMI or get lost.......lovely
So my deal fell through......and there I was, with a $500K home loan that couldn't even buy a home....Paying $3600 a month on a loan that was literally useless.....
So where am I today
Once it became apparent that my situation was hopeless, I decided to pay the economic cost and walk away.
Now I'm back in the market looking for a home and a lender who will lend. And I'm a little worn, weary and bruised.
I have a good deposit. Very solid income. No credit cards, no car loans, no personal loans.....I'm rock solid....well, I'm rock solid with a credit defualt to my name....
apparently I'm worse than a crminal....lol
Which leads me to my question - what is the way forward from here?
How do I avoid Insurers like Genworth who are showing absolutely zero tolerance towards any type of credit default?
Looking for some help....
Cheers
George
The Broker who can get me out of this mess will be my best freind for life :
Timeline
Nov 2007 - I took out a home loan with Homeside lending for $500K to purchase a property for $545. LVR was 91.7%.
Feb 2008 - I became concerned about rising interest rates and decided to fix my loan for 4 years at 8.29%.
Feb 2009 - I sold the property and tried to pay out my loan but was told the economic cost would be $80k!
Bank said "We're not going to let you sell this property unless you give us some security on this loan". They said I needed to have another property to switch the loan over to.
I told them I wasnt ready to purchase another property. So we came to an agreement ---> sell the property and throw the $500k into a Term Deposit which was going to act as security until I sorted myself out and found another property to buy.
Aug 2009 - I find a nice little house in Carindale, Brisbane. Asking price was $619K. Seller accepts offer of $615k.
I managed to save a deposit of $65k, plus I was going to take care of the Stamp Duty.
Where it gets interesting
- I go back to Homeside and tell them I've found a place to buy and I would like to use my existing mortgage of $500K, plus borrow an extra $50k. Plus I was putting in $65K.
- They do the sums and on the surface everything is hunky dory. Low expenses, great cashflow.
- 4 weeks later they come back to my mortgage broker and tell him that I have a $400 credit default against my name....listed with Veda Advantage.
To cut a long story short, I had two outstanding accounts with utility companies from a couple of years ago. I paid these accounts immediately as I did not want my property purchase jeprodised. They were genuine oversights.
The Clincher
- Homeside push my application to Genworth (their Lenders Mortgage Insurers) and they flat-out refuse to insure my mortgage because of the past credit defaults.
- so I tell my broker "they do know I already have the loan right?" He said yes, but that they don't care and there's nothing he can do.
- back and forth we go for days, trying to fight this....trying to get Homeside to swing some influence. Trying to get Genworth to see some common sense. We go all the way to the Homeside State Manager...but zilch...nothing.
Homeside tell me I either come up with the 20% deposit and avoid LMI or get lost.......lovely
So my deal fell through......and there I was, with a $500K home loan that couldn't even buy a home....Paying $3600 a month on a loan that was literally useless.....
So where am I today
Once it became apparent that my situation was hopeless, I decided to pay the economic cost and walk away.
Now I'm back in the market looking for a home and a lender who will lend. And I'm a little worn, weary and bruised.
I have a good deposit. Very solid income. No credit cards, no car loans, no personal loans.....I'm rock solid....well, I'm rock solid with a credit defualt to my name....
apparently I'm worse than a crminal....lol
Which leads me to my question - what is the way forward from here?
How do I avoid Insurers like Genworth who are showing absolutely zero tolerance towards any type of credit default?
Looking for some help....
Cheers
George