From this interview. Dominic Perrottet's wife states the following:
"I think to get the deposit, we scraped together, we maxed out every credit card we had to try and get the deposit together. It was tricky"
If they were maxing out credit cards just to form a deposit, how would they qualify for any sort of home loan?
Mortgage broker here.
In order to determine a surplus/deficiency from your assets/liabilities, your CC limit, monthly repayments and amount owing are required from the customer to consider wether or not they have the capacity to service the loan using the Genworth calculator. In other words, Helen is full of shit.
Well if they were on high enough income, then they could max out their 50k credit card and still have cash flow to service a then 600k apartment with LMI or parents as guarantor. For example.
Their early 30s was only less than a decade ago so they would also need a lot more help then just finding scraps for their deposits.
So I don’t think is entire full of shit but is definitely not complete picture
You are correct but I have no doubt in my mind that the bank will question why they have maxed out all their CC’s if they have a healthy income to service the loan.
Non-broker here, but I agree, Helen is full of shit, and God will be asking questions at Heaven's gates.
Not all banks or brokers ask for amount owing. Broker I spoke to said they calculate with the limit only.
Same where I work. The limit is the thing, not the balance.
Seems like a self-defeating purpose really
Especially as the interest rate on credit cards is about 20%
Then what credit do you have left to buy new furniture, white goods, removallist, solicitor, loan appliaction fees etc ?
i would ignore anything dominic perrottet's wife says tbh
I would ignore what comes from the herald sun full stop.
As I kid I believed it, because I didn't know anything and I assumed they did, but now I know a few things, and every article from that paper written on something I know about turns out to be wrong.
If it's wrong on the stuff I know about.. it's probably wrong on the stuff I don't know about, too.
It's basically tabloid garbage, meant to entertain not inform. No higher standard than Womans Weekly
Well it is News Corp owned…
I would ignore anything they both say.
do people have THAT many cards?? We have 2, one that we use most of the time, and the other is a travel card
Churning my
Maybe if they took out a cash advance. But at 20% interest that would be supremely stupid.
Then again, the system the bank uses isn't all that smart. Maybe you could do a cash advance on the CC for the deposit, borrow more than you need for the house (citing 'renovations') but use the extra to immediately pay off the CCs, thus only incurring a few days worth of interest. Technically fraud.
Not sure how that would be fraud. No reason you can’t change your mind about when you plan to do renovations the day after your loan settles.
Nah you just get the loan for 'market value' of the house you just signed for and the cost of the house happens to be lower than the loan amount. Thus covering the card debt you have.
That doesn't make sense. Cheers
Almost gave you a -1, as 2 negs = +
Seems par for the course from any Liberal MP’s wife.
In assessing a loan application, banks factor it the full credit limit and the minimum payment required to service the full limit as your debt obligations. If that is the case, then there is no harm than to maximising the money in your account for about a month your application is being assessed. As the extra money of the due amount on the credit card but sitting in the saving bank account will be taken as your deposit. Issue is when it comes to settlement of the loan the banks would expect you to front up your share of the deposit. So, unless you are sure that between the loan application and the settlement period you are able to save the deposit, you will end up paying hefty credit card interest on the credit card debt. Or, if you are renting, once you stop paying rent and move into your own house it may free up some cash to pay back the credit card debt. But again, it is generally it is cheaper to rent then to pay our own mortgage.
It may work for some people, but it is very dangerous strategy. Particularly for a public figure to publicise it, not good.
Agree 100%
BTW Is the lady that benefited from the ambulance that Dominic Perrotet did not tell his mates to get her…?
Bank usually likes to see your savings pattern that shows how you saved for your deposit and can service the loan. I don't believe that you can draw cash on multiple credit cards to use as a deposit, it doesn't make sense or show you can service the loan.
Sounds like one of those stories you tell to illustrate the point but it isn’t exactly what happened.
One house I bought needed $10,000 in one account and I had money coming in another account, but not in time, so took a credit card advance for the interim, or I wouldn’t have had the deposit.
The story shows you were doing everything and committing everything, which is the point, not that they were proud of paying CC interest on a mortgage deposit.
A literary device is a writing technique that writers use to express ideas, convey meaning, and highlight important themes in a piece of text. A metaphor, for instance, is a famous example of a literary device. These devices serve a wide range of purposes in literature.
Don't ask how it rains cats and dogs.
I think she meant they collected the deposit amount, while they still need to pay for things, rather than use cash they use up funds in credit card instead. They could be doing cash advanced from the card
Yeah this is what I think she meant too
*maxed out every credit card Daddy had
Have to wonder if they had a "liar loan" ie not disclosed all liabilities / limits. Assuming he's had his home / mortgage for more than a few years, if he took it out before Comprehensive Credit Reporting was introduced, his bank may have relied on his disclosure of liabilities and limits. And if not everything was disclosed then he may well have qualified for a larger loan amount than he would have if all was disclosed.
A lot of big IFs there - no idea what he had or what he disclosed at the time.
If they were maxing out credit cards just to form a deposit, how would they qualify for any sort of home loan?
You can't use a credit card to buy a house, that would be hilarious. Put $200k on various cards and get 25% interest charges or have to constantly do 0% balance transfers.
Banks take creditcard limits as LIABILITIES not ASSETS. If you had $200k of available balance on a credit card, your loan power is reduced by an amount up to that value. If you had $200k of credit card debt then yeah, you are F'd.
Helen is full of it.
I heard a few story about people doing something similar in Canada or the US (to buy not for the deposit iirc) but this was more than a decade ago and not really sure what and how they did it.
Can't see it working here.
I instructed my bank years ago to stop asking me if i want to increase the limit of my credit card.
It gets me how some people brag about how much they can put on the card its something i never considered using to get a loan.
Credit laws in Australia have changed some years back. Now banks are not able to offer you unsolicited credit increases. I haven't received one in about 10 odd years.
The banks assess your loan capacity assuming all your credit cards are fully drawn to their limits. So there is not benefit from a loan capacity perspective.
Only works if maybe you have a short term cashflow timing issue for the deposit eg. you use your cash for the deposit while putting everything on credit until your next pay cycle when you pay off the cards completely - or at least the minimum repayment. But the interest rates are hefty on credit cards so suggesting you max your credit cards out for some kind of long term deposit funding strategy is insanity.
I’m So Sick of Gen Xers and Boomers Trying to equate their “struggle” to buy housing as on par with the struggle Gen Y/Millennials face today.
"we had to pay 15% interest"
banks ignore the balance on cc. they only consider the cc capacity