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Considering transforming your home from ‘banal’ to ‘brilliant’, but lack the funds to support your makeover? Never fear, we’ve rounded up five home renovation finance options that could help turn your dream into reality.

1 Equity Release / Top Up Home Loan

This is probably the most common way people borrow money when they want to renovate. It involves borrowing against the current value of your home, before any value-adding renovations and in most cases allows you to obtain the funds upfront. You won’t be able to borrow the full value of your home but, without mortgage insurance, you can usually borrow up to 80 per cent of its value if you own it outright. One potential problem is that the cost of your renovations may actually be higher than the equity you have available. If you run out of funds mid-construction, and if the property is then not in sound, lock up condition, you may have an issue obtaining extra funds down the track.

2 Construction loan

If you’re planning to completely transform your home and undergo a major makeover, this may be a good option as you can spread the cost over a long period of time. You could even possibly borrow up to 90 per cent of the end value of your home and take advantage of mortgage rates which tend to be lower than credit card and personal loan rates. With a construction loan, the lender will assess the value of your home after the renovation based on the building plans and you can typically borrow against that value.  You won’t be given the full loan amount upfront, but usually in staggered amounts over a period of time – this is called ‘progress payments’ and is linked to a fixed price building contract which will be from your builder.

3 Line of credit

When you apply, you can establish a revolving credit line that you can access whenever you want to up to your approved limit. You only pay interest on the funds you use and, as you pay off your balance, you can re-borrow the unused funds without reapplying if that becomes necessary.  However, care must be taken not to get in over your head in terms of serviceability. Make sure you can make repayments on the line of credit that will reduce the principle because your minimum repayment only pays the interest, it will not reduce the loan. Rates on this product are typically much higher than a construction loan or top up loan. This product feature is great if managed well, but can also be a trap if not seriously considered as your limit will never change.

4 Personal loan

If you’re only making minor renovations – personal loans are usually capped at around $30,000 – this might be suitable, but interest rates on personal loans are higher than on home equity loans and payments need to be made usually over a maximum of seven years.

5 Credit cards

This option should only be considered if you want to undertake really small renovation projects. The interest rates are usually much higher than on mortgages, but for a very small project, that extra interest might actually total less than loan establishment fees.

*HomeBuilder

If you’re looking for further assistance to be able to afford your property renovation project, the Federal Government recently announced $25,000 grants for eligible Australian owner-occupiers to build a new home or substantially renovate an existing home. The Government’s HomeBuilder package is designed to assist the residential construction market by encouraging the commencement of new home builds and renovations. Income and other conditions apply and this grants program is active until 31 December 2020. For more information visit the Treasury website.

One thing you must do

There are very few exceptions to the rule that your renovations should add more value to your home than they will cost to carry out. Think about how the money you spend on a renovation will increase the value of your property. For example, consider making changes that would appeal to the majority of potential buyers to help you sell your house faster and at a higher price.

Contact us at Glenavon Finance to help choose the best way to fund your renovation project. 

Published by Glenavon Finance

With interest rates at an all-time low, and many lender’s fixed rates lower than their variable options, locking in an interest rate on your home loan to guard against possible future fluctuation may be attractive. However, it pays to know the ins and outs of fixed-rate loans before committing to one.

When purchasing a property, refinancing or just renegotiating with your current lender, borrowers can generally decide between fixed-interest loans that maintain the same interest rate over a specific period of time, or variable-rate loans that charge interest according to market rate fluctuations.

Fixed-rate loans usually come with a few provisos: borrowers may be restricted to maximum payments during the fixed term and can face hefty break fees for paying off the loan early, selling the property or switching to variable interest during the fixed rate period.

However, locking in the interest rate on your home loan can offer stability.

For those conscious of a budget and who want to take a medium-to-long term position on a fixed rate, they can protect themselves from the volatility of potential rate movement.

Fixed rates are locked in for an amount of time that is prearranged between you and your lender.

There are some lenders that offer seven-year or 10-year fixed terms, but generally one to five years are the most popular. The three and five-year terms are generally the most popular for customers because a lot can change in that time.

Further to this, fixed-rate loans can also be pre-approved. This means that you can apply for the fixed-rate loan before you find the property you want to buy.

When you apply for a fixed rate, you can pay a fixed rate lock-in fee also known as a ‘rate lock’, which will, depending on the lender, give you between 60 and 90 days from the time of application to settle the loan at that fixed rate.

It will also depend on the lender as to whether the rate lock will be applied on application or approval. It is important to be clear on this issue as it has been known to be a common point of error.

Pre-approval helps you to discern how much money you are likely to have approved on official application. Knowing that your potential lender will offer a fixed-term fixed interest loan gives further peace of mind for those borrowers looking to budget precisely rather than be susceptible to rate fluctuations.

In addition, borrowers should consider the possibility of arranging a ‘split’ loan. This option allows you to split your loan between fixed and variable rates – either 50/50 or at some other ratio. This can allow you to ‘lock in’ a fixed interest rate for up to 5 years on a portion of your loan, while the remainder is on a variable rate which may give you more flexibility when interest rates change and potentially minimise the risks associated with interest rate movements. Also, be aware that at the end of the fixed-rate term, your loan agreement will include information about how the loan will then be managed by the lender, usually to a ‘revert’ variable rate – which may not be the lowest the lender offers.

Speak to us about how to finance your property purchase and whether you are eligible for pre-approval.

Published by MFAA

If you are finding it tough to meet your current financial obligations or you are just interested in reviewing your current home loan, then you are not alone. Mortgage brokers stand ready and able to assist with your options during this difficult time.

Turbulent does not even begin to describe 2020 so far. As a result of COVID-19 and not forgetting the bushfires, thousands of Australians are out of work, with Treasury predicting that the jobless rate will double in the June quarter from 5.1 per cent to 10 per cent. Many others have had their hours reduced or have been temporarily stood down.

In this period of uncertainty, at the very least many will be taking a closer look at their finances to make sure their current loan arrangements are right for them. Mortgage and finance brokers have the experience and knowledge to assist in a variety of situations and are simply an internet search or phone call away. Mortgage brokers are in regular contact with their lender panel and make it their business to understand the different options lenders currently offer.

And while the options can seem straight forward, it is easy to miss the details and differences that can add up, particularly over a 30-year term. For example, a number of banks are offering to temporarily freeze mortgage repayments for three or six months. While this may seem like a good option, it is important to fully understand the implications. This could mean that the total debt will increase. Of course, depending on an individual’s circumstances, there may be a number of available alternatives that may reduce repayments while not increasing your interest bill as much in the long term.

Refinancing too may be on the minds of many as a result of the Reserve Bank cutting rates and banks passing them on, to varying degrees, as well as access to a range of competitive fixed interest rate options on the market. A discussion with your local mortgage broker may be just the ticket.

While a simplistic view of what constitutes a great mortgage is the one with the lowest interest rate, mortgage brokers know that what suits one person might not necessarily suit another. For instance, fixed interest rates can offer piece of mind as interest rates increase, but they can be the cause of anxiety if rates fall or if unforeseen circumstances require a change.

No matter what your circumstances are, mortgage brokers can actively assist you in navigating your current situation. So, if you’ve been thinking about reassessing your finances and are not in contact with your broker, do yourself (and your cashflow) a favour and call them now!

Click here to contact us now.

There is more to selling your home than putting up a ‘For Sale’ sign on your front lawn. Here are the first things you should check off your list to help you get a favourable result from your investment and to ensure the process runs as smoothly as possible.

Choose a quality agent

Asking family and friends who have purchased or sold a property about their experience is a great way to ensure the agent you’ve enlisted will provide quality service, explains an MFAA accredited finance broker. “A website and promotional material will always highlight the agent in the best possible way, but word of mouth and past client reviews will show their true colours,” she says.

Make sure the agent specialises in your area and is someone you feel comfortable around as they don’t just negotiate prices on your behalf, they also act as a mediator and represent you as a vendor.

Prepare the paperwork

Getting together all the documents required is a tedious yet necessary part of the process. Before a property can be marketed for sale, your agent requires a copy of the Contract from your legal representative, explains the broker. From a disclosure document to a home loan pre-approval, ensure all the paperwork is prepared in time to ensure it all runs smoothly.

Don’t take things personally

Remember this is a business transaction; don’t feel insulted if you receive feedback on the property that doesn’t match how you feel about your home. To ensure you come out with the best deal, remove all emotion and think of your house as a commodity.

Your property won’t sell itself

Thinking that your home will sell itself can be a costly mistake. Despite how much you like the way you have it set up, furniture, flooring and painting changes can make a big difference to the property’s wider appeal, and marketing it widely can increase the competition and, therefore, the price.

“Engage in a thorough marketing campaign and invest in presenting your property in its best light,” advises the finance broker. “Trusting your agent’s strategy can help secure the best financial result.”

Speak to your broker

If you are making a decision to sell, speak to your finance broker to ensure that your plans after selling – whether they are buying a similar property, upgrading or building – are actually feasible.

“I always advise clients to speak to their broker first to make sure their plans for post-settlement are realistic,” says the finance broker. “There is nothing worse than selling your home and then not being able to achieve what you had set out to do.”

Surround yourself with a good team

When all of the people in your network, including your broker, conveyancer and agent, communicate effectively, you should be blissfully unaware of any minor issues that pop up during the course of the sale, explains the finance broker.

Glenavon Finance is here to help and will be able to refer you to a great agent and other professionals that will help make the home selling process flow with minimal stress. Contact Us Here

If you are concerned about servicing your loan, reach out to your local mortgage broker for help.

As Australians everywhere take a close look at their financial circumstances, mortgage brokers stand ready to lend a helping hand.

Whether experiencing financial hardship through job loss, a reduction in work hours, or business disruption, an increasing number of Australians may be struggling to balance their books as a result of the Coronavirus, and in many cases are wondering how they will continue to pay the bills.

Difficulty with repayments

According to research conducted by Finder in early 2020, about one in five mortgage borrowers, or about two million Australian households, were struggling to make repayments, despite record low interest rates.

And with the challenging circumstances that have emerged since, it is anticipated that these pressures will only increase forcing more people to require financial assistance.

Financial relief strategies

In this difficult time lenders have responded by announcing financial relief strategies. In an official Australian Banking Association (ABA) statement, CEO Anna Bligh said, “Banks stand ready to support customers and if anyone is in need of assistance, they shouldn’t wait but come forward as soon as possible”.

Different lenders have different assistance options. These may include, waiving fees on early term deposit withdrawals, interest rate freezes on loans, options to defer or restructure home loan repayments, and emergency credit card limit increases.

It is important to remember that mortgage brokers have the knowledge, experience and relationships necessary to assist people experiencing or expecting to have trouble paying their home loans as a result of changing circumstances.

In times like these, the importance of mortgage brokers in assisting customers with hardship and facilitating access to credit cannot be overstated. For many Australians – particularly those in rural or regional areas – brokers may represent the only source of assistance. 

Expertise of brokers is of critical support

Brokers’ expertise in helping customers navigate the complex home lending market – and their intimate understanding of their customers’ personal circumstances – means they are uniquely positioned to provide critical support for customers when discussing hardship and available options with lenders.

If you have any questions or concerns about your existing loans, need further guidance on hardship assistance, or have other questions about your loan arrangements, click here to Contact Us

So, you’re thinking about getting a deposit bond?

Whether you’re a first home buyer, seasoned property investor, downsizing or buying off the plan, chances are you have a few questions.

Don’t worry – we’ve got the answers you need.

Here are the 10 most common deposit bond questions answered:

#1. When do I pay back the deposit?

You actually never “pay back the deposit” unless there is a claim. The role of a deposit bond is to “guarantee” you for the deposit amount right up until you get the funds at settlement. In other words, a deposit bond tells the vendor that you’re good for the money.

Then, at settlement, you pay the full purchase price plus the deposit and any additional costs, like stamp duty. The only money that is exchanging hands is the deposit bond fee, which you pay to the provider up-front.

#2. How much does a deposit bond cost?

It depends on the deposit bond amount and the required length of time. Talk to our team for a quote.

#3. Do I pay interest?

No – you only pay the one-off fee just before your deposit bond is released. That’s the brilliant thing about a deposit bond.  To get a quote for your deposit bond please contact us.

#4. I am buying off the plan – how long does the deposit bond need to be made out for?

In most cases, buying off the plan means the deposit bond needs to be issued up to the “sunset clause” date. The sunset clause date is a provision in off-the-plan contracts that allows either the vendor or the purchaser to rescind the contract if the title to the property has not been created by a specific date.

Find the sunset clause date in your contract of sale or ask our team to help. While you’re there, look out for a separate clause in your contract relating to deposit bonds – some vendors may request to add additional time on a deposit bond.

If you can prove that settlement occurred earlier than 6 months from the expiry date of the deposit bond, a pro rata refund can be obtained. The maximum refund applicable is 18 months. Terms and Conditions do apply – refer to your deposit bond application or bond provider’s website, or ask our team for help.

#5. Do I need to seek approval from the vendor to use a deposit bond to secure my purchase?

Definitely. Always check with the real estate agent or directly with the vendor to make sure they will accept a deposit bond instead of a cash deposit.

#6. What are the differences between a deposit bond and a bank guarantee?

The idea is basically the same: a bank guarantee is a guarantee from a lending institution ensuring the liabilities of a debtor will be met. So, if the debtor fails to settle a debt, the bank covers it.

But there are some important differences that might impact which you choose for your situation:

  • Bank guarantees are secured – they require real estate or cash security to release.
  • Deposit bonds are unsecured – the eligibility assessment is just to ensure you have the financial capacity to settle on your purchase, and the Underwriter provides the security and assurance that the deposit will be honoured in the event of a claim.
  • Bank guarantees usually have higher set-up and ongoing costs compared to the one-off deposit bond fee.
  • Bank guarantees require more paperwork for set-up compared to the deposit bond application.
  • Deposit bonds are usually faster to obtain than a bank guarantee.

#7. How quickly can a deposit bond be issued?

Much faster than you think. Within 15 minutes, we can help you get preapproval. Within one business hour, we can have your application form ready for e-signing. And, once you return your signed application with the bond fee payment, your deposit bond can be ready in less than one business hour!

#8. Am I eligible for a deposit bond?

Each scenario is different, but you are typically eligible if:

  • You hold formal finance approval, OR
  • You have at least got conditional finance approval that is subject to valuation only, OR
  • You are selling a property and funds from the sale are enough to purchase your new property outright.

If none of these apply, or when a property settles over six months, your deposit bond provider will need to conduct an asset, income and liability assessment. To be eligible, you or your guarantor will need to own a property with some equity. 

The best way to check if you are eligible is to talk to our team.

#9. I am a first home buyer; can I get a deposit bond?

If you already have formal approval for your finance through a family guarantor loan, and your property settles within six months, you can typically obtain a deposit bond. The good news is there’s no need for your guarantor to also sign your deposit bond.

If settlement is more than six months or you don’t have finance approval, your guarantor will need to apply with you for your deposit bond. Your or your guarantor will need to have a property with the equity to release a deposit bond. This is to ensure the guarantor can pay back the deposit bond amount in the unlikely event of a claim on your bond.

#10. How do I obtain a deposit bond?

Obtaining a deposit bond is easy. Simply talk to our team. We will work with the deposit bond provider on your behalf, so you don’t need to add another thing to your list.

The supporting documents you need will depend on your application type, so we’ll tell you exactly what you need to provide. Then, when the application is ready, we’ll send it to you for electronic signing. It’s as easy as that!

Have you got some questions we haven’t answered here? Talk to our team.

So, you’re thinking about getting a deposit bond?

Whether you’re a first home buyer, seasoned property investor, downsizing or buying off the plan, chances are you have a few questions.

Don’t worry – we’ve got the answers you need.

Here are the 10 most common deposit bond questions answered:

#1. When do I pay back the deposit?

You actually never “pay back the deposit” unless there is a claim. The role of a deposit bond is to “guarantee” you for the deposit amount right up until you get the funds at settlement. In other words, a deposit bond tells the vendor that you’re good for the money.

Then, at settlement, you pay the full purchase price plus the deposit and any additional costs, like stamp duty. The only money that is exchanging hands is the deposit bond fee, which you pay to the provider up-front.

#2. How much does a deposit bond cost?

It depends on the deposit bond amount and the required length of time. Talk to our team for a quote.

#3. Do I pay interest?

No – you only pay the one-off fee just before your deposit bond is released. That’s the brilliant thing about a deposit bond.  To get a quote for your deposit bond please contact our team.

#4. I am buying off the plan – how long does the deposit bond need to be made out for?

In most cases, buying off the plan means the deposit bond needs to be issued up to the “sunset clause” date. The sunset clause date is a provision in off-the-plan contracts that allows either the vendor or the purchaser to rescind the contract if the title to the property has not been created by a specific date.

Find the sunset clause date in your contract of sale or ask our team to help. While you’re there, look out for a separate clause in your contract relating to deposit bonds – some vendors may request to add additional time on a deposit bond.

If you can prove that settlement occurred earlier than 6 months from the expiry date of the deposit bond, a pro rata refund can be obtained. The maximum refund applicable is 18 months. Terms and Conditions do apply – refer to your deposit bond application or bond provider’s website, or ask our team for help.

#5. Do I need to seek approval from the vendor to use a deposit bond to secure my purchase?

Definitely. Always check with the real estate agent or directly with the vendor to make sure they will accept a deposit bond instead of a cash deposit.

#6. What are the differences between a deposit bond and a bank guarantee?

The idea is basically the same: a bank guarantee is a guarantee from a lending institution ensuring the liabilities of a debtor will be met. So, if the debtor fails to settle a debt, the bank covers it.

But there are some important differences that might impact which you choose for your situation:

  • Bank guarantees are secured – they require real estate or cash security to release.
  • Deposit bonds are unsecured – the eligibility assessment is just to ensure you have the financial capacity to settle on your purchase, and the Underwriter provides the security and assurance that the deposit will be honoured in the event of a claim.
  • Bank guarantees usually have higher set-up and ongoing costs compared to the one-off deposit bond fee.
  • Bank guarantees require more paperwork for set-up compared to the deposit bond application.
  • Deposit bonds are usually faster to obtain than a bank guarantee.

#7. How quickly can a deposit bond be issued?

Much faster than you think. Within 15 minutes, we can help you get preapproval. Within one business hour, we can have your application form ready for e-signing. And, once you return your signed application with the bond fee payment, your deposit bond can be ready in less than one business hour!

#8. Am I eligible for a deposit bond?

Each scenario is different, but you are typically eligible if:

  • You hold formal finance approval, OR
  • You have at least got conditional finance approval that is subject to valuation only, OR
  • You are selling a property and funds from the sale are enough to purchase your new property outright.

If none of these apply, or when a property settles over six months, your deposit bond provider will need to conduct an asset, income and liability assessment. To be eligible, you or your guarantor will need to own a property with some equity. 

The best way to check if you are eligible is to talk to our team.

#9. I am a first home buyer; can I get a deposit bond?

If you already have formal approval for your finance through a family guarantor loan, and your property settles within six months, you can typically obtain a deposit bond. The good news is there’s no need for your guarantor to also sign your deposit bond.

If settlement is more than six months or you don’t have finance approval, your guarantor will need to apply with you for your deposit bond. You or your guarantor will need to have a property with the equity to release a deposit bond. This is to ensure the guarantor can pay back the deposit bond amount in the unlikely event of a claim on your bond.

#10. How do I obtain a deposit bond?

Obtaining a deposit bond is easy. Simply talk to our team. We will work with the deposit bond provider on your behalf, so you don’t need to add another thing to your list.

The supporting documents you need will depend on your application type, so we’ll tell you exactly what you need to provide. Then, when the application is ready, we’ll send it to you for electronic signing. It’s as easy as that!

Have you got some questions we haven’t answered here? Talk to our team.

Struggling to get access to a 10% cash deposit for your property purchase? You’re not alone.

Whether you’re a first home buyer, downsizing or investing, getting the deposit together is one of the major hurdles facing home buyers today.

But more and more Australians are realising there’s a smart alternative to a cash deposit: a deposit bond.

In this article, we’ll cover what you need to know about deposit bonds, so you can decide whether it’s the right solution for you.

What is a deposit bond?

Also known a deposit guarantees, a deposit bond is used in place of the cash deposit required between signing the contract of sale and settlement.

Think of a deposit bond as an IOU for the deposit amount you need to secure your property. 

Just like a cash deposit, a deposit bond guarantees your commitment to an unconditional contract of sale. Then, at settlement, you simply pay the full purchase price, including the deposit amount and any other costs, like stamp duty.

The only money that is exchanging hands is the deposit bond fee, which you pay to the deposit bond provider upfront.

What it is not?

There can be confusion that a deposit bond can be used as a deposit to help secure finance from your bank or lender. That’s not the case.

In fact, a deposit bond can only be used as the deposit (up to 10%) to guarantee your commitment to the purchase of real estate or land to the vendor.

Why use a deposit bond?

Deposit bonds are a smart option if you want to purchase a property but don’t have ready access to a cash deposit – but you will by the time of settlement. You might be a first home buyer who simply doesn’t have enough cash sitting in the bank for the deposit. Or you might be downsizing to a smaller property, but because you haven’t yet sold your current home, your deposit is still tied up.

Here are 3 facts you need to know about deposit bonds:

Fact 1: A deposit bond guarantees up to 10% of the purchase price

A deposit bond provider “guarantees” you for the deposit bond amount right up until you get the funds at settlement. In other words, it gives comfort to the vendor that you are committed to the sale. The most important thing is that you always check with the real estate agent, developer or vendor to make sure they will accept a deposit bond instead of a cash deposit.

Fact 2: You pay no interest

This is where a deposit bond becomes really attractive. There’s no interest to pay on deposit bonds – you only pay the one-off fee just before your deposit bond is released. In most cases, this means a deposit bond is more financially advantageous than taking out a personal loan or redrawing to pay your home deposit.

Fact 3: Deposit bonds are very versatile

Deposit bonds can be used for lots of situations:

  • To buy a home, vacant land, commercial property and off the plan.
  • For settlements of less than six months or more than six months.
  • For private treaty sales and auctions.
  • Whether or not you currently hold finance approval from a bank or lender. If you don’t, you may still be eligible by assessing your income, assets and liabilities to verify that you will have the funds to settle on your purchase.

To find out more about deposit bonds and work out whether they’re right for you, contact us today.

With official interest rates trending downward, shrewd mortgage holders may take the opportunity to call their lender to ask for a better deal.

But when even a small interest rate reduction means potential savings of thousands of dollars, is a simple phone call really enough to get you there?

In 2019, ‘your interest rate should have a three in front of it’, is common advice for home owners considering the competitiveness of their loan settings.

But while a number of lenders offer lower rates to new customers, it’s not always so simple for existing customers to secure the same outcome.

A leading mortgage and finance broker says that if people want a better deal on their mortgage, there are basically two options:

  1. Call your bank and ask them to match the new rate, or
  2. Contact your broker and vote with your feet.

And although the first option is commonly recommended, lenders aren’t always so obliging when it comes to rate-matching to get you a more affordable mortgage.

“As an existing client, it can be disheartening to see your bank offer new customers a lower rate to the one you currently have.

“Lenders regularly try to ‘win’ new customers by offering low rates. It is a great acquisition strategy.

“But if they refuse to match your current rate to this new offer, you can always contact a broker and refinance with a lender who is hungry to win your business.”

Mortgage brokers, on average, have access to a panel of 34 lenders and this creates competition amongst lenders. Mortgage brokers are also in a position to offer you a more in-depth and customised level of service. This can allow them to find their customers a mortgage product that may suit their current needs, wants and circumstances.

Contact Us here to find a broker that can help.

Published by MFAA

The Buy Now Pay Later sector is winning-over the youth demographic with the promise of instant gratification, but leading mortgage brokers are warning that with every sugar-high comes the risk of a corresponding low.

‘Buy Now Pay Later’ providers such as AfterPay and Zip Pay have experienced massive growth in popularity, with the number of users jumping from 400,000 to approximately 2 million between 2015 and 2018.

Driven by a simple proposition whereby the Buy Now Pay Later provider pays the merchant on behalf of the customer, allowing the customer to obtain the goods or receive a service immediately while subsequently paying off the debt generally through instalments, Buy Now Pay Later presents a tempting offering.

But as the sector’s breakneck growth continues, mortgage professionals are warning users, particularly in the younger demographic, to be cautious of overdoing it as this could risk effecting their chances of securing a home loan further down the track.

“It’s the layby of our day but in reverse. It’s your forward credit for an item, which I don’t agree with,” said one leading mortgage broker.

“In theory, it makes sense. You get the item or service and pay it off over instalments, so you’re actually putting forward your liability.

“This might be ok for someone that manages their money well, if they pay off the item on time and use their mortgage offset account correctly. This way they’re delaying expenses and offsetting more of their savings against their home loan.

“But there’s probably one per cent of people doing that and the rest of them are spending beyond their means,” the broker added.

As a result, according to this broker, there may also be a stigma associated with using Buy Now Pay Later schemes rather than paying up-front and in-full.

“Utilising this payment method may potentially send the wrong message to a bank.

“If a lender sees a ‘buy now pay later’ provider frequently on a client’s bank statements, that can trigger more questions about their spending behaviours and ultimately may mean they choose to decline the application.

“I would much prefer to see my clients save for the item and demonstrate those good habits.”

If you are concerned about your level of expenditure or your ability to secure a home loan, a conversation with your local mortgage broker could set you on the right path.

“It’s important to appropriately manage your expenses well in advance of applying for a home loan, that way you can show the bank that you can save and afford to service a mortgage when the time comes,” the broker said.


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