It is a fact that if you are in an undischarged debt agreement you will not be able to qualify or be approved for a home loan.
There are people right now who are struggling with debt repayments but would really like to buy their own home.If you are in such a position, click here you may not wish to consider a debt consolidation agreement because of how this particular debt solution will impact your ability to borrow for a home.
While this is certainly a valid viewpoint, it is worth to consider the following before making a decision.
Bad Credit Limits Borrowing Options
Unfortunately not taking up a debt agreement does not offer one much protection from bad credit.
Generally speaking people who are considering a debt agreement are already struggling to maintain existing debt repayments.
Majority of debt agreement applicants have some bad credit due to the financial pressures they are experiencing.
It is all very well to decide that the impact of a debt agreement on your ability to borrow is undesirable, but what protection can you put into place from falling behind with debt repayments and defaults being listed on your credit report. After all defaults will also preclude you from qualifying for a home loan with a traditional lender. Therefore sometimes in avoiding a debt agreement you are simply putting off the inevitable.
Discharged Borrowers can Qualify for a Mortgage
Borrowers who have been discharged from a debt agreement are able to qualify for a home loan from day one of discharge. However the required deposit is much larger than for clean credit borrowers. You would need to have a deposit of 15% -25% depending on postcode of property and your financials. Also traditional lenders will be unwilling to consider your application. However there are a number of non-conforming lenders who specialize in bad credit borrowers.
Of course it is also worth noting that in trying to avoid a debt agreement you may be placing yourself at risk of bankruptcy proceedings brought against you by your creditors. Should that occur, the implication for the individual is more severe than the implication of a debt agreement.