Paying off your education is no reason to put off buying property.
You can remember it now: sitting in a chair at the back of the lecture theatre, chatting to your friends and ignoring the debt that each day at university was plunging you into.
But now you’re older and wiser, and reality has set in. You want to buy a property, but you’re unsure how your student HECS or HELP debt could impact your ability to take out a loan.
When you apply for a home loan, you’ll need to reveal information about your liabilities, poor credit ratings and any other debts you have. This is where you need to start worrying about your student debt.
If you chose to defer any of your HECS/HELP payment, you don’t need to start paying it off until you’re earning an annual taxable income of $54,869 or more.
At this point your employer is required to hold a percentage of your taxable income and direct it towards your HECS/HELP loan. The percentage increases with your income but tops out at 8 per cent when you earn over $101,900 annually.
Essentially, this decreases your net annual income.
, believes that mortgage brokers are more than capable of dealing with the impact of student debt on a loan application.
“By having the ability to compare several lenders at the one time, the broker is able to recommend a product suitable for the applicant’s individual needs,” says the broker.
“During the initial contact with the applicant, the broker will complete a broker fact find, enabling a comprehensive financial analysis to be conducted,” says the broker. “From there, guidance can be given on paying down or consolidating debt in order to reduce outgoings and increase borrowing capacity.”
If you’re getting ready to buy a property for investment or to live in, there’s no need to hold out because you’re still paying for your education. To find out more, call us on (08) 8362 4555 today.
Reproduced with the permission of the Mortgage and Finance Association of Australia (MFAA)
This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person. Past performance is not a reliable guide to future returns.
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author.
Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.