Getting a loan will be harder f or defaulters
MAINTENANCE def aulters ar e shortly g oing t o find it mor e difficult t o bu y pr operty, thank s t o proposed amendment s t o the N ational C redit A ct (NCA) r egulations.
Richard Gr ay, CEO of H arcourts Real E state said the amendments, which will be t abled in P arliament soon, pr ovide for monthl y maint enance p ayments t o be added t o the lis t of debt oblig ations that lender s must include w hen c onducting the aff ordability as sessments.
They also pr ovide f or an y judgment ag ainst a maint enance defaulter t o be added t o that per son’s cr edit r ecord, and t o r emain there f or fi ve y ears or until it is rescinded b y a c ourt.
“Sadly, maint enance def aulting is all t oo c ommon in this c ountry, where almos t half of all children ar e being r aised b y single parents, but the J ustice Dep artment is hoping the se amendments will help chang e this situation,” said Gr ay.
“We anticip ate the y will mak e it e xtremely difficult f or an yone who is not meeting their maint enance oblig ations t o their children, t o obt ain financ e t o bu y a home or in vestment pr operty.”
The NCA alr eady s tipulates that an y b ank c onsidering a homeloan application mus t fir st establish what the pot ential borrower’s inc ome is, w hat the r egular monthl y e xpenses ar e, and what debt r epayment oblig ations he or she alr eady has as per an y credit agr eements lis ted b y the credit bur eaux.
It also set s out s tiff penaltie s for an ything per ceived t o be “reckless” lending and w e kno w how this has aff ected homelo an lending o ver the p ast f ew y ears, with the b anks t ending t o err on the side of caution.
— Business E ditor.
Maintenance de faulters ma y find it har d t o buy pr operty s oon.