re: mortgage for credit impaired

I have a friend looking for some help in moving forward. He has an unpaid default to ANZ for $18000 which is currently in arrangement. (Can pay if necessary) He is a very high income earner, been in the same job for 3 1/2 yrs as an award free manager and been in the same industry for 20 years.

He has a current mortgage on his PPOR with St George for last two years, an A rated St George P/L and an A rated St George credit card. His previous mortgage was with AMP and has been in his current address for nearly 3 years.

He also has a cross file on his CRA which the default is on. The file had not been cross referenced to him when he was approved to his St George loans.

Are there any brokers out there that think they may be able to help him? If so, please PM me.
 
He also has a cross file on his CRA which the default is on. The file had not been cross referenced to him when he was approved to his St George loans.

Are there any brokers out there that think they may be able to help him? If so, please PM me.

Whats a cross file?

And from personal experience while the default remains unpaid it will be almost impossible to refinance. After its paid then the door will slowly be opened but not by the big 4!!!!
 
Whats a cross file?

And from personal experience while the default remains unpaid it will be almost impossible to refinance. After its paid then the door will slowly be opened but not by the big 4!!!!

Cross-file is that the person is known as another name, which also makes things more difficult.

I am not too familiar with mortgage lending criteria, but with motor finance, due to the A rated checkable credit we would be able to get something like this over the line.

He is willing to pay off the default if he knows he will be able to obtain finance
 
Just paying the debt will not guarantee the loan will be approved.

There are many lenders that will consider it however all boils down to the lvr as to what the interest rate charged will be.

The amount is fairly high so tell him to expect to be put through the ringer when it comes to paperwork requests.
 
Just paying the debt will not guarantee the loan will be approved.

There are many lenders that will consider it however all boils down to the lvr as to what the interest rate charged will be.

The amount is fairly high so tell him to expect to be put through the ringer when it comes to paperwork requests.

He was put through the "ringer" before. Paperwork is not an issue, as he has all up to date tax returns, pay slips and good bank statements and credit card statements or p/l statements.

He has a very healthy income and stable employment, so all is OK on that side of things. I would say he would be looking at 80%LVR, looking to pull out equity from his home.
 
You say he is a high income earner. Why not start by paying the 18000 immediately? At least that clears the debt and then worry about obtaining a new loan.
 
To give you an idea had a loan declined for two defaults paid, one for $138 and the other for $168, both Telco.

The mortgage market has changed.

There could be a few non conforming lenders but as per some of the last posts the interest rate would be higher.

Interesting that St George did not pick up on it.
 
He is willing to pay off the default if he knows he will be able to obtain finance

If I was the bank manager and knew that he was only prepared to pay off the debt if he was given more debt, I'd run a mile. He should want to pay the debt because he owes the money.
 
If I was the bank manager and knew that he was only prepared to pay off the debt if he was given more debt, I'd run a mile. He should want to pay the debt because he owes the money.

Ding !

The willingness speaks volumes

car finance is a diff beast, with very little getting in the way because they are willing to carry the higher risk for the tripled margins

ta

rolf
 
If I was the bank manager and knew that he was only prepared to pay off the debt if he was given more debt, I'd run a mile. He should want to pay the debt because he owes the money.

He is paying this debt off currently at twice the minimum instalment required for over the last six months.

He decided not to pay full in one go if he is going to be in the same situation regarding lending for property and has used his other funds for other purposes.

He is at the final stages of a full renovation of his PPOR which he bought all the highest quality materials. That is where his money has been going to for the last 18 months. This is why he didn't pay the ANZ default in one payment.

I think he understands he may pay a higher rate, but would be better than not doing anything until this default has dropped off his CRA and knows that this can be changed down the track when things change on his CRA
 
Alex

2 small telcos defaults should have been able to get those away at standard rates no problems (Drop me an email if you want the lender doing them and be happy to give you the info and a contact).

Cales - There is paying a higher rate and paying a higher rate. Has he considered redrawing the overpaid repayments and using these as a deposit as oaying a higher rate on a new purchase is one thing but to have to pay it on both refi and purchase is a different matter.

Remember also that any lender that does the deal will want to be charging an early exit fee for probably the first 5 years as well.
 
Alex

2 small telcos defaults should have been able to get those away at standard rates no problems (Drop me an email if you want the lender doing them and be happy to give you the info and a contact).

Cales - There is paying a higher rate and paying a higher rate. Has he considered redrawing the overpaid repayments and using these as a deposit as oaying a higher rate on a new purchase is one thing but to have to pay it on both refi and purchase is a different matter.

Remember also that any lender that does the deal will want to be charging an early exit fee for probably the first 5 years as well.

There would be no redraw on the agreed payment of default to ANZ as this being 10 years old are in the hands of a debt management company and default is listed by them now, not ANZ.

The equity in his home has been created from renovation, so to access any funds from this would have to be a refi.

If the default is going to be on his CRA for the next 4 to 5 years, the early exit fee should be the least of his problems. I guess rate would matter if it were to go well into the teens, but up to 10% he would be better off taking this option for inv purposes and can negative gear at the highest tax bracket.

This would be better than waiting for five years for his CRA to be cleared as the 5 years lost in the market will be irrelevant to the higher interest, especially being on the highest tax bracket will catch him up a little.
 
He is paying this debt off currently at twice the minimum instalment required for over the last six months.

He decided not to pay full in one go if he is going to be in the same situation regarding lending for property and has used his other funds for other purposes.

He is at the final stages of a full renovation of his PPOR which he bought all the highest quality materials. That is where his money has been going to for the last 18 months. This is why he didn't pay the ANZ default in one payment.

I think he understands he may pay a higher rate, but would be better than not doing anything until this default has dropped off his CRA and knows that this can be changed down the track when things change on his CRA

From a lender's perspective, there's your problem in a nutshell.He could pay ANZ, but chose not to due to other priorities.

All the research keeps telling us, if they do it once, they will do it again.
 
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From a lender's perspective, there's your problem in a nutshell.He could pay ANZ, but chose not to due to other priorities.

All the research keeps telling us, if they do it once, they will do it again.

Yes, I can understand that, but the debt management company advised he didn't have to pay it in one go and gave him a repayment plan which he has been making twice the minimum required.

He also asked what difference it will make in regards to the default being listed on his CRA whether he pay it in full or he make instalments and they advised the length of time would be the same, the only difference will be noted as being paid or unpaid, which at this stage his bank St George said it wouldn't make a difference being paid or unpaid, they wouldn't lend him anymore.
 
What he didnt ask, or the bank failed to tell him, was the longer it is listed as unpaid, the worse it gets, so yes, they wont lend to him now whether its paid or unpaid, but in 2 years time, providing there are no other credit defaults in the meantime, they may (or another lender) have more scope in their decision.
If it were me, I'd pay the defualt in full now. There may be an opportunity cost of not being able to borrow for a time, but holding off paying the default doesnt make that time any shorter, it stays on the credit file for 5 years after it is noted as paid, or settled (you can come to an arrangement to pay only part of the debt with the credit company)
The credit company are making a nice little earn on this, they wont advise him to pay it back early, they'd much prefer a tidy little income stream!
 
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