Road to recovery
Question from Karen updated on 24th May 2012:
Our expert Kris Pedersen responded:
A lot will depend on if your personal credit was adversely affected through the liquidation. If it was then you may need to wait roughly another 12 months for it to clear off your credit check (adverse data stays on there for five years). The banks are more lenient in regards to higher LVR lending if it is for the purpose of purchasing an owner occupied property but you need to compare the two options and see what is likely to set you up better for retirement. It is hard to compare whether aggressively paying down debt or creating equity is a better option for you without knowing what surplus funds you have after expenses on a monthly basis. If you are on good incomes and time poor then paying down debt is a good option potentially and if you do this then structure some of the initial mortgage as a revolving credit facility so you can access the funds without needing to go back to the bank to ask for a top up to move forward with your investing. If you are relatively tight in regards to surplus cash but have the time and skill set then renovating may be the way to go.
Kris Pedersen of Kris Pedersen Mortgages is a commentator on property and finance. His team sources top finance strategies. www.krispedersen.co.nz