Part 9 debt agreement home loans – what you need to know

If you’re struggling with debt and considering a Part 9 debt agreement, you may be wondering how it could affect your ability to take out a home loan in the future. Let’s take a closer look at the key facts you need to know about Part 9 debt agreements and home loans.

What is a Part 9 debt agreement?

A Part 9 debt agreement is a binding agreement between you and your creditors to repay your debts over a set period of time. This can be a useful option if you’re struggling to make repayments on your debts and need some breathing space to get back on track. However, it’s essential to understand that entering into a Part 9 debt agreement will impact your credit score and could limit your ability to take out credit in the future.

How does a Part 9 debt agreement affect your home loan application?

If you are in the process of applying for a home loan, your lender will conduct a credit check, and your Part 9 debt agreement will show up on your credit report. This means that it’s likely to affect your ability to secure a home loan, as lenders will view you as a higher risk borrower.

However, it’s not impossible to get a home loan while in a Part 9 debt agreement. Some lenders may be willing to consider your application if you can demonstrate a stable income and savings history, and if you have paid off your debt agreement in full.

Bear in mind that if you do manage to secure a home loan while in a Part 9 debt agreement, you may face higher interest rates or a lower borrowing limit than you would otherwise.

What can you do if you’re struggling with debt and want to buy a home?

If you’re struggling with debt and want to buy a home, it’s essential to take steps to get your finances back on track. This might involve seeking professional advice from a financial counsellor or debt adviser, looking at ways to increase your income or reduce your expenses, and developing a realistic budget.

It’s also worth considering alternatives to a Part 9 debt agreement, such as a debt consolidation loan or a debt management plan. These options may be better suited to your needs, and they could help you to regain control of your finances more quickly.

The bottom line

Entering into a Part 9 debt agreement can be a useful option if you’re struggling with debt, but it’s essential to understand the implications for your credit score and your ability to take out a home loan. If you’re considering a Part 9 debt agreement, it’s a good idea to seek professional advice and explore all of your options before making a decision.