How to buy a house when you have a HECS debt
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.
Scott Durrant 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, brokers able to recommend a product suitable for the applicant’s individual needs,” says Scott.
“During the initial contact with the applicant, we will complete a broker fact find, enabling a comprehensive financial analysis to be conducted,” says Scott. “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. Send us a message and we’ll be able to help with any HECS or HELP debt questions you might have.
Speaking of education…
We run courses for first home buyers just like you. They run through the whole process of buying a home, and it won’t cost you a HECS debt. Seriously, it’s time and money well spent, and will probably help you save some money in the long term.
You can read first home buyer testimonials here.
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