Bad Craa is there a way around it?

Terry covered that well.

Just to add –

The worse the default the more you end up paying in rate.

The fact you are addressing it, definitely helps. From what you have written, where default is paid off by end of year 2007, it sounds like you may be paying it off. If so approach them to ask if they can remove it now. If you are paying it off, they may do so, and it does not hurt to ask.

Regards
John

Inspired Finance

[email protected]
(02) 9944 7776

We can’t give advice on what to do, but…..

2 Major purchases in a persons life are a house, and a car.

One normally increases in value.
The other normally decreases in value.

Only you can answer if a car may be needed for income producing activities like work.

On the other hand, your low deposit plus baycorp default will limit your stategies.

Regards
John

Inspired Finance

[email protected]
(02) 9944 7776

Why don’t you buy a car for $1-2K and keep the rest for your deposit.

Prices aren’t moving fast so there is no rush to buy that unit tomorrow.

Build your deposit and start looking at units. Aim to have looked at 50 before you make an offer – that way you will be an expert at picking a good buy and will know what is priced properly.

In the meantime see if you can get that CRA fixed. As mentioned above it never hurts to ask the lender to remove the CRA mark.

Don’t get caught in the trap of trying to own a nice car like your mates. Are they in a financial position that you envy? Find someone that is doing what you what to do and living the way you want to live. Ask them for advice and see what sort of car they would drive in your position.

I am not a poor man and I drive a 10 year old Commodore. My wife is a Dr and she drives a 9 year old Excel. We are both happy with them. Both cars together would be worth under your $10K mark yet we could buy a new Audi for cash if we wanted to. We just know that it will cost us a lot in opportunity cost down the track and we will never enjoy it enough to warrant the price tag – is just a car after all. My ten year old wagon is used to carry tools and reno gear, sandy kids and dogs and to pull my 30yr old boat! I wouldn’t want to do any of those things with a brand new Audi!

So make sure you understand what a car really costs before you buy it. I have an article I wrote on that very subject. Drop me an email and I will send it to you. Anyone else too. If you have young friends then pass it onto them. Quite a few people have had an AHA moment with it – to paraphrase Steve

[biggrin]

Cheers,

Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985

Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

Normally when purchasing the costs including stamp duty, etc equate to approximately 5%. Therefore for each property you need 105% of the purchase price.

In the case of a First Home Buyer the costs are lower because of reduced stamp duty. As a guide approximaely 2%. Therefore 102% of purchase price is needed.

200,000 x 102% = 204,000 less loan of 90% (180K, but can get higher LVR) Less FHOG of $7,000 (more in Vic) = $17,000 required.

The Baycorp default will play a part, so best you discuss with your broker.

Regards
John

Inspired Finance

[email protected]
(02) 9944 7776