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GETTING A HOME LOAN WITH A STUDENT DEBT

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University Graduates are likely to accumulate a HELP debt as part of completing their tertiary studies. HELP allows students to defer the payment of their tuition until after they commence word, in the form of a Government loan program. Under Help, repayments of the loan, do not commence until you start work and your salary reaches a nominated repayment level.

The adjacent table shows, the repayment rate applicable to each level of income which a lender will use to calculate your HELP repayment based on your income (Table for 2018/2019 rate).

So back to the question! Does your HELP debt prohibit your lending ability?

Absolutely NOT! Like any other debt, the lender will take into consideration how much money you are required to pay each year and deducts this amount from your disposable income calculation. We can confidently say that your HELP will reduce your borrowing capacity, however it will still keep you in the race for a Home Loan.

TIP Your HELP debt will not prohibit you from applying and possibly getting approved for a Home Loan as a lender will consider HELP as another loan that has to be repaid. However, your HELP debt will influence your borrowing capacity, therefore it is relevant to consider ways of offsetting its impact. Some strategies you can adopt to assist you in doing this include:

Brisbane Home LoansGetting A Home Loan With Student Debt
Brisbane Home LoansGetting A Home Loan With Student Debt

Reduce as Much Other Debt as Possible. Consider debt associated with personal loans and credit cards and where possible try to pay them down. Depending on the collective amount owed, you may benefit from consolidating high interest debt into a lower interest loan;

Work on Your Financial Health. The impact of HELP is that it reduces your income and your ability to service a loan. Showing your future lender that you are disciplined at saving will help your cause. Ensure your account is reflecting regular savings from your salary and if possible, find other opportunities where additional money can be saved. Even a cash gift occasionally looks good going into an account. Whenever possible, transfer the money into higher interest accounts or fixed interest accounts which offer a higher rate of interest;

Cut, Cut and Cut Some More. If possible, have a close look at those unnecessary expenses you can do without and eliminate them or reduce them. Every dollar you stop spending moves into savings, helps your financial health and shows the lender that you are disciplined, committed and responsible which obviously will help your cause;

Seek Advice from Your Brisbane Home Loan Mortgage Specialist.

TIP Brisbane Home Loans works with more than 40 Lenders in Australia, some of which have a higher appetite, for approving loans of graduates with HELP loans. We can assist you with a plan, that over time will prepare you for your application and direct the loan where it is most likely going to be approved;

Don’t Apply for Too Many Loans. You may not be aware that every time you apply for a home loan, your lender will do a credit rating check on you. Every credit rating check is recorded and seen by subsequent lenders however, they have no idea why previous credit rating checks were done. Often, a lender will assume that an individual, with a high number of credit rating checks, is an indication of a bad credit rating red flag. Try to avoid multiple loan applications and focus on working with one Broker that you trust will work hard for you.

Brisbane Home LoansGetting A Home Loan With Student Debt
Brisbane Home LoansGetting A Home Loan With Student Debt