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My Husband and I have been in contact with a broker in regards to a home loan. We have 3 very small loans that are currently in the process of being paid and paid in full. Our broker has suggested we consolidate these 3 small loans and then look at a home loan. I don't see the point in this as they are so close to being paid off. We only have a short time frame to look at getting a home loan due to the First home owners grant ending in June. I'm very hesitant to consolidate because what if we do then we don't get approved for a home loan? He has said consolidating is going to benefit us but couldn't really explain how, he then went on to say if we consolidated it will look better for us and he can see that we can afford a mortgage etc. Has anyone ever heard of this? To me is doesn't seem worth doing and we will just wait and miss the FHO grant.
5 Replies
It makes sense to me. 1 bigger loan over 3 smaller loans looks more responsible. Not only that, interest will decrease only having the one loan. If its a problem pay off the loans then apply for a home loan.
In my experience banks do not like dealing/approving home loans to people who have outstanding loans. Having 3 looks worse than just having 1. When we applied for our first home loan we only had about 2k left owing on a loan and they wanted it paid out before we were approved. Consildating will save you money especially if you are paying interest on those loans. Your repayment for 1 consiltated loan would probably be cheap than what you are paying now for all 3 loans.
I would take the advice of your broker
It just is. We consolidated 2 small loans, I paid out and cut up my partners credit card and canceled my Myer card on our brokers advice and she got us a pretty good loan offer.
Don't bank on the FHOG, because it only applies when you build or purchase a newly built home. So if you are looking at existing homes then it's already out of the equation.
I would go with the broker's advice, it's the whole reason you went to them in the first place, right?