Your best chance of getting home loan authorization is when you start rebuilding your credit and showing sound financial habits. Every year after you are released from your debt contract, your creditworthiness will improve. This gives you a better chance of being approved for a home loan. The longer you wait, the better and cheaper your credit history will be. Once you paid the agreed amount, you paid that debt. Many large banks will not lend as long as the default remains in your credit file, so you may need to apply for an alternative lender for an unproductive loan. It would be for a guaranteed loan to buy a car, for example. Many lenders can only accept your application if you have been released from the debt agreement for up to two years. With a debt contract, your creditors agree to accept a sum of money that you can afford.
You pay this over a certain period of time to pay off your debts. You can borrow up to 80% of LVR (value of the property) if you have been in the contract for at least 12 months and have made perfect repayments in the last six months. With a debt contract on your credit file, lenders will be careful to keep you in debt, which is not bad. If you want to apply for a home loan after entering into your debt contract, you must first apply for a loan with a subprime lender at a higher interest rate. The long-term goal would be to refinance with a consumer lender at a better interest rate once your bad rating has been corrected. Each lender has a different application process, but will generally look very closely at all behavioural statements. Any small injury, such as an overdraft or dishonor, will be seen in a negative light in light of your credit history. It is extremely important for you to behave cleanly and flawlessly in managing your finances before applying for a home loan. Lenders that take into account candidates with credit problems or a Part 9 home loan may include, among other things, credit defaults or a low credit rating in several variants.
In the search for a home loan, the most serious problem with credit is missed payments for an existing mortgage. The number of delayed or missed payments and the number of days delayed create a much higher risk of not repaying the new loan on time. Refinancing loans is also difficult under these conditions.