25 Apr How to buy a house when you have a HECS or HELP debt
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, any other debts you have and any poor credit ratings if applicable. This is where you may 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. 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, your broker is able to recommend a product suitable for your individual needs.
Your broker will complete a broker fact find, enabling a comprehensive financial analysis to be conducted. From there, guidance can be given on how paying down or consolidating debt can help 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. Find out more from your finance broker today.
Credit Representative 487350 is authorised under Australian Credit Licence 389328
The information provided is general in nature only. Your full financial needs and requirements need to be assessed prior to any offer or acceptance of a loan product.
*Subject to lender’ criteria, term and condition as well as fee and charges.