Steve Mickenbecker
speaker
56 appearances
1 recordings
1 series
first heard Mar 2022
last heard Mar 2022
Steve Mickenbecker’s voice in public audio — every appearance, attributed to the second.
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Appearances
What people have to remember with credit cards is that the banks have to allow for credit card repayments when they're assessing whether you can afford to repay a home loan.
And it's not just the repayments of the existing debt.
The banks have to build in repayment of your credit card limit over three years and pretend that you've fully drawn it and have to repay that debt.
So it means two things.
One is clear your credit card debt.
But two, if you're applying for a home loan, get rid of those unwanted credit cards or get a lower credit card limit on them.
So you're not going to be hit with that.
It could mean your borrowing capacity will be reduced by a couple of hundred thousand dollars because you've got a lazy credit card debt or a fat limit that's not being used, but the bank has to allow for that in the repayments.
So fix up the credit card before you start applying for home loans.
I mean, it's all debt, isn't it?
But one point is that it's a very low number compared to credit card debt at this stage.
The second point is that if you repay on time, you have no interest charge.
Buy now, pay later is fine, used properly.
If you are spending money that you can't actually afford to repay in a couple of months, then you'll end up in the same situation as, I guess, a whole generation of baby boomers and Gen Xs did with credit card debt.
It can be a trap.
Look at your budget and only going to buy now, pay later if you can make those, the four repayments and clear it in that time.
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