{"id":1242,"date":"2015-11-05T18:07:00","date_gmt":"2015-11-05T07:07:00","guid":{"rendered":"http:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/2015\/11\/05\/why-paying-off-your-credit-cards-is-not-enough\/"},"modified":"2015-11-05T18:07:00","modified_gmt":"2015-11-05T07:07:00","slug":"why-paying-off-your-credit-cards-is-not-enough","status":"publish","type":"post","link":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/2015\/11\/05\/why-paying-off-your-credit-cards-is-not-enough\/","title":{"rendered":"Why paying off your credit cards is not enough"},"content":{"rendered":"

Reproduced with the permission of the Mortgage and Finance Association of Australia (MFAA) <\/span><\/em><\/p>\n

Getting your mortgage application together can require quite a bit of financial scrutiny. In order to figure out your serviceability, your potential lender will look deeply into your finances. \"\"<\/p>\n

It\u2019s a no brainer to take your credit card debts into consideration when applying for a mortgage. But what many people do not realise is that high credit card limits will not bode well for a home loan application.<\/p>\n

If you have a high credit limit, you also have a high debt risk in the eyes of your lender. As the logic goes, there is no stopping you from boosting your credit card limit the day after your loan is approved.<\/p>\n

\u201cWe have to take account of 3% of the total credit card limit, regardless of what the applicant owes,\u201d says Homeloans Ltd BDM Sally Carmichael.<\/p>\n

\u201cIf they had a $10,000 limit but they only owe $1000, we still have to assess $300 a month and that comes directly out of their liability. It does make quite a difference.\u201d<\/p>\n

Even if you haven\u2019t put a cent on your credit card for the past five years, a high credit limit will negatively affect your serviceability. The best thing you can do is lower your credit limit, or cancel that credit account entirely.<\/p>\n

\u201cYou need to pay out your credit cards and avoid having any other debt,\u201d says Carmichael. \u201cYou need to be able to use your full amount of income.\u201d<\/p>\n

For those that have to pay off their credit account before dreaming of cancelling their liability, it is imperative that you pay your debt on time, according to your minimum repayments.<\/p>\n

The first step towards finding your new home is to contact us to help to sort out your finances.<\/p>\n

Reproduced with the permission of the Mortgage and Finance Association of Australia (MFAA) <\/span><\/em><\/p>\n

http:\/\/www.mortgageandfinancehelp.com.au\/<\/a><\/span><\/p>\n

Important note:<\/strong> This provides general information and hasn\u2019t taken your circumstances into account.\u00a0 It\u2019s important to consider your particular circumstances before deciding what\u2019s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person. \u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Reproduced with the permission of the Mortgage and Finance Association of Australia (MFAA) Getting your mortgage application together can require quite a bit of financial scrutiny. In order to figure out your serviceability, your potential lender will look deeply into your finances. It\u2019s a no brainer to take your credit card debts into consideration when […]<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[19],"tags":[],"class_list":{"0":"post-1242","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-general-articles","7":"entry"},"_links":{"self":[{"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/posts\/1242","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/comments?post=1242"}],"version-history":[{"count":0,"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/posts\/1242\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/media?parent=1242"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/categories?post=1242"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.gpadviser.com.au\/gpl-theme-1-2015\/wp-json\/wp\/v2\/tags?post=1242"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}