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Beware Bad Bills
McKinley Plowman Director and finance partner Paul Moran is asked for his views on how bad debts can impact home loan applications in this article for The Sunday Times Home Magazine. “First homebuyers need to be mindful that defaults in credit cards, personal loans, rent payments or mobile phone bills can come back to haunt them,” says Paul. “It is understandable that banks want clients with no history of default on other debts and loans and maintaining a clear credit history is a key to a positive/smoother loan application process.”
Paul says many banks will automatically reject a first homebuyer application for any default above $500, while others have a higher limit of $1000. He says there are still some financiers who will agree to lend to borrowers with defaults or who have been declared bankrupt, but the client always pays for this through a higher interest rate.
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