You have been working really hard for two years in a full time job. You receive a solid and steady income. Every week you put money aside to save for a deposit on your new home. You have been planning and designing every detail from the flooring to the fabric of the curtains. You wonder if you will ever there. You reach your goal amount! You are now able to begin searching for the house you have been working so hard for.
You do some research, find a mortgage broker, and begin the process of applying for a home loan. Your mortgage broker asks you a standard array of questions. One of those questions is if you have any problems on your credit file. You declare a store card that you had when you were younger. At this time your spending was out of control and you were unable to keep up with the payments. Although you eventually paid this debt you were still struck with a black mark on your credit file at that time.
Because of this, you could only be approved for high interest finance through a second-tier lender. They charged a large initial fee and offered an interest rate two percent above what you could have got if you had a clean credit file.
Cost of this: A large amount of your deposit.