Browse Forums Home Finance 1 Feb 21, 2011 10:04 pm Hi guys, very happy to have stumbled upon this site. Seems to be a wealth of information and full of some very helpful members! Glad to have joined up In the coming months my girlfriend and I plan to purchase our apartment together to live in (both first home owners) We plan to spend about 430k on a 2 bedroom unit in the Hills District of Sydney. We currently have 43k genuine savings over last 18 months. We plan to have over 50k before we apply. We also expect the 7k FHOG. I currently earn over 60k and rising (although 9k is car allowance, hopefully this is irrelevant as car is fully owned). My partner is on 47k. Where I am concerned is the debt I am currently paying off. The highest my debts ever reached were about 16k from being young, buying cars, and being foolish with my hard earned money. Currently have about 5k left to pay off which is currently sitting on a balance transfer 1.99% credit card and the credit card has never been used once to make a purchase.. purely was for debt consolidation and low interest pay-off I recently obtained a copy of my credit report, and I have a total of 7 credit inquiries dating between Nov 2008 and July 2010. -4 were for personal loans (only 3 I actually went ahead with, all for car purchases) -2 were for credit cards (although one I backed out of) -1 for a measly optus phone contract that is through my work and not even private! Also there was one more inquiry I was expecting to see for November 2010 for my balance transfer card, my report is dated 7th of December, so perhaps it takes longer for an inquiry to show up and maybe if I'm lucky the NAB never did an inquiry on me. My day-to-day banking has been with ANZ for about the last 6 months, our home savings account with ING, and my credit card with NAB (which will soon be payed and CLOSED) By the time we apply for our loan in a few months, we both will be 100% debt free (except my 18k Uni HECS loan). No cards, we'll own both our cars, and have an excellent record of collaborative savings. Is it possible I'm worrying too much about my previous credit inquiries? Or is there something I can do to alleviate any risk here I never understood about credit inquiries previously, and would apply for a credit card on the drop of a dime purly for a lower interest rate.. damn my parents for not educating me better in these issues!!! My history kind of makes it look like I love bouncing between credit cards and loans a little, although atleast for the 6-12 months before loan application there will be no inquiries.. Also, should I wait 2-3 months once my NAB card is payed, or as soon as we are totally debt free is it a good time to start looking?? Sorry for the essay guys, but I'd love to read some feedback! Re: First Home Mortgage Application - too many credit inquir 2Feb 21, 2011 11:13 pm I was in very similar situation, my fiancee and I applied for a land loan, had $20k savings and 2 cars, 2 motorbikes as fully owned assets, then we got rejected from bwest... After a bit of hunting around we were told that we were declined because I had too many credit inquiries - it was so frustrating/confusing because it was not like they were bad credit reports, it was just us applying for credit cards, mobile phones, loans etc like yourself (majority we never ended up even going ahead with). After a far bit of discussion between the bank and our financial advisor the loan was approved...but only just! So...there is always that possibility but you sound like you have a good credit history, a good savings amount so you should be right The road to success is always under construction House completed April 2011 - slowly making it a home... Re: First Home Mortgage Application - too many credit inquir 4Feb 21, 2011 11:27 pm Welcome mike22!! looks like your a "night owl" as well Your credit file is not the best but it's also not to bad, so dont be to dis-hearted!! becasue even though you have a lot of inquiries ( which isn't good boy and girls ) you really only have 3 -4 defaults. When a bank does a "credit score" they don't only look at your credit file...the top 7 things they look at are: 1. Overall strength - Low LVR under 80%? good serviceability , Loan amount 2. Employment history/status and how long? 3. How many credit inquiries in the last 12 month 4. How many listed defaults over $500 5. Type of loan ( debt, investment, PPOR, business, refin? 6. Been at current residence for more then 2 years? 7. Having Genuine savings There are 2nd tier lenders/credit union out there that WILL lend to you; even with a bad credit file, some do not even do a credit scoring- but their rates is not worth the time (7.8% +) especally if you have a good amount of savings and good employment. Your best option is to apply for a loan under 80% LVR - this will avoid the LMI as the insurance company are quite hard on "credit file" Regards Michael Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Re: First Home Mortgage Application - too many credit inquir 5Feb 21, 2011 11:29 pm Zarli is correct! as long as you have a good reason for these credit file..and your overall strength of the "deal" is all OK....you will be fine. Communication is Key! Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Re: First Home Mortgage Application - too many credit inquir 6Feb 21, 2011 11:39 pm lastly- sorry promise to be last post.... Reading your post again, it sounds like you only have 1 default? and it;s currently $5,000...this alone will push your credit score to "high risk"...you might want to wait till you pay this off in full before applying. Do you have any another listed defaults over $500? Regards Michael Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Re: First Home Mortgage Application - too many credit inquir 7Feb 21, 2011 11:45 pm yeap bit of a night owl for sure here my only current active debt is the one credit card which has been active since late November. It has an 8k limit, although there is currently 5 still owing and this amount will be nill by May. Only then would I consider applying for our joint loan. Does this mean together we would have zero defaults? also if the credit inquiries are only considered in the last 12 months, then I should have nothing to worry about? Hopefully this is correct!!!! Re: First Home Mortgage Application - too many credit inquir 8Feb 22, 2011 8:02 am mike22 yeap bit of a night owl for sure here my only current active debt is the one credit card which has been active since late November. It has an 8k limit, although there is currently 5 still owing and this amount will be nill by May. Only then would I consider applying for our joint loan. Does this mean together we would have zero defaults? also if the credit inquiries are only considered in the last 12 months, then I should have nothing to worry about? Hopefully this is correct!!!! What do you mean you have "5 still owing" ???? are you saying you have 5 more payments to go...or you have 5 defaults listed for this same credit card?? sorry im a bit confussed here. And No it does not mean you have zero default. Becareful here, it is true that they concentrate on the last 12month inquiries- but they will still look at the bigger picture and will still have a glance at the last 5 years to see what your average inquiries numbers are over a 5 years period and this will still have a small bearing on your loan. However for "defaults" they look NOT at the last 12 month- but for the last 3 years!! If you want you can email me your credit file, and i can give you your "credit score number- based on the CBA system" - it will be pretty accurate, maybe 5-6 points off only out of 100. Regards Michael Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Re: First Home Mortgage Application - too many credit inquir 9Feb 22, 2011 1:56 pm sorry;) I meant I have 5k still owing.. I'm currently paying off between 1500-2000 dollars each month, so by May the card will be payed off, and the credit card will be cancelled. Meanwhile we are still both contributing to our ING savings account and by May should be JUST shy of 50k savings. I thought defaults meant repayments that are over 60 days old and unpayed?? I have zero defaults as stated by my credit report Thanks for your help mate, sorry to be a bit vague! Re: First Home Mortgage Application - too many credit inquir 10Feb 22, 2011 2:53 pm mike22 Thanks for the reply mate, may I ask how many inquiries you had on your report when you were applying? I seem to remember that there was 7 Not sure how correct that is...but yeah there was wayyy to many for the time period that they were in. I suppose they were right in seeing them as a bad thing, as majority of them were us deciding we 'needed' a new car, or 'needed' this credit card to go on this holiday etc...even though we didn't go ahead with them, the application was still made and who is to say we wouldn't do it again after taking our a huge home loan, making it harder for us to pay or service the loan (does that make sense, cos it sort of does in my head ) Good luck ! The road to success is always under construction House completed April 2011 - slowly making it a home... Re: First Home Mortgage Application - too many credit inquir 11Mar 09, 2011 10:05 am Hi, I recently apply for a mortgage and its declined, my mortgage brocker told me that I have 11 enquiries in the past 6 months, I dont know how it came to 11, I have apply for a car loan through a brocker probably he applied everywhere, anyways I got 50K savings but still, I was told by the brocker to wait another 6 months and apply, because my land is get title only after september. So give the 10% advance from my account and wait till the land get tittle and apply for a loan on that time. Is it the right way to go ahead? Re: First Home Mortgage Application - too many credit inquir 12Mar 09, 2011 1:40 pm If your credit hits are only for credit applied for and no defaults it is possible for you to obtain a 90% lend. You need to make sure you go with a lender that does not credit score and you provide your bank/broker with a detailed explanation of what the credit enquiry was used for or if it was not taken up. i had a client with 11 enquiries in 3 years with no defaults and a few lenders were fine with that. Most were credit card applications or personal loans he never accepted credit for. Land at Chermside At tender stage Re: First Home Mortgage Application - too many credit inquir 13Mar 09, 2011 1:50 pm Same here, my only debt is a credit card with 11K and owing a 8K from that, but I am ready to pay off that any time, as I got a 50K deposit in my account. Anyways I am going for a land that get tittle later this year, so I hope it should be fine on that time. May be more savings as well. There is no way that I have a bad credit, bcos I pay all my bills on time. Anyway I will order a credit file from veda Re: First Home Mortgage Application - too many credit inquir 14Mar 09, 2011 3:20 pm Having an active credit file is fine- as long as you have a reason for each one- Our firm is currently working on one with around 52 enquiries - yes can be a nightmare... but the banks just wants to know why. Having defaults on your file is a different story! and can be a deal breaker- depending on the value and outcome. P.s An active credit file is Def a loan you would place via the smaller banks- the big banks will just eat it up based on their" credit scoring"- especially if your after a loan with an high LVR Regards Michael Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Re: First Home Mortgage Application - too many credit inquir 15Mar 09, 2011 3:34 pm urk697 Hi, I recently apply for a mortgage and its declined, my mortgage brocker told me that I have 11 enquiries in the past 6 months, I dont know how it came to 11, I have apply for a car loan through a brocker probably he applied everywhere, anyways I got 50K savings but still, I was told by the brocker to wait another 6 months and apply, because my land is get title only after september. So give the 10% advance from my account and wait till the land get tittle and apply for a loan on that time. Is it the right way to go ahead? Urk697- 11 enquiries is nothing! given the amount of compeition in the makret place these days Just give them a good reason for the enquiries - IM guessing from your rejection this was a loan place via the Big banks and you had a High LVR??? Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Re: First Home Mortgage Application - too many credit inquir 17Mar 09, 2011 5:36 pm Defaults = Missed/ late payments listed on your credit file LVR = Loan to property value ratio ...IE what % is your loan compared to the property value, Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Re: First Home Mortgage Application - too many credit inquir 18Mar 10, 2011 8:37 am Several lenders will auto decline your loan if you have more than two enquiries in the last six months or more than four in the last year. It is actually quite complicated as the lenders will credit score your application which takes everything into account. In particular if your are borrowing over 80% of the property value then the number of enquires and your net asset position have a lot of weight. The good news is that some lenders just ask for an explanation for the enquries as well as bank statements for your cheque account to confirm which debts you actually do have. They can then consider overriding their credit score. Typically this is ok to 90%, however in some cases up to 95% as well. We all hate credit scoring, however the reality is that it is a very accurate method of assessing the risk of new loan applications. For this reason few lenders override their credit score, and the mortgage insurers almost never do! Re: First Home Mortgage Application - too many credit inquir 19Mar 15, 2011 11:08 am jb_money Several lenders will auto decline your loan if you have more than two enquiries in the last six months or more than four in the last year. It is actually quite complicated as the lenders will credit score your application which takes everything into account. In particular if your are borrowing over 80% of the property value then the number of enquires and your net asset position have a lot of weight. The good news is that some lenders just ask for an explanation for the enquries as well as bank statements for your cheque account to confirm which debts you actually do have. They can then consider overriding their credit score. Typically this is ok to 90%, however in some cases up to 95% as well. We all hate credit scoring, however the reality is that it is a very accurate method of assessing the risk of new loan applications. For this reason few lenders override their credit score, and the mortgage insurers almost never do! Which are the other lenders, because usually all the lenders use a computer system, so it wont pass in the first section then how they will ask for the explanation, my own bank didn't, and they wont even ask for explanations. Re: First Home Mortgage Application - too many credit inquir 20Mar 15, 2011 11:16 am Urk697- most of the non-banks and smaller lenders allow for explanation. it's only the "bigger banks- big 4 + another" that auto rejects due to the amount of loans they get everyday; it's just not worth their time and effort. For CR problem, i highly suggest speaking to a broker- because experienced brokers would know how to word the explanation in a way that are acceptable to the banks, there are certain "triggers" different banks looks for. Regards Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Thanks for the response! However, it's have been sorted. But for others benefit here is what we had to do. Unfortunately, it's not straightforward. BCC washed their hands… 3 7244 I would never build with Fowler homes. I built with them in 2021 and till date maintenance issues are pending. All their existing trades and businesses don't work with… 14 106600 They already have two well known ones (HIA & MBA) that many new home buyers mistakenly think are regulatory bodies that Joe Public can complain to. 6 18067 |