You can buy now and pay it off later. Never pay another mortgage. Experts warn this could soon become a reality for many Australians already in the pay later mode.

7 News reports that schemes like Zip Pay, Afterpay, and Openpay are becoming more popular among Australians 18-34. These services allow customers to shop for the most trendy clothes and the latest gadgets without the need to pay upfront.

Pay-later credit limits are also lower than credit card credit limits. AfterPay’s credit limit is $2,000, which is considerably less than the credit card credit limit of $12,000.

Pay-later programmes could turn down borrowers

Cheryl Brown, a mortgage agent with eChoice, said that consumers with debts with providers who provide pay-later services may be denied a loan.

They view it as short term cash. If you can’t afford the little things, then you’re not going to afford the big things like paying a mortgage or buy car loans,” she told a  Current Affair.

Many borrowers won’t reveal details about pay-later transactions. TicToc Home Loans founder Anthony Baum can tag this as an additional credit.

It is often an oversight to understand that it is a form of debt. Afterpay allows people to purchase things they don’t want and with money they can afford. He stated that it is possible to get a loan approved within a matter of minutes. 7 News interviewed him.

How to avoid the dangers associated with paying-later policies

According to Catherine Dodd, a mortgage broker from Aussie Home Loans, it is becoming a more common trend to not use traditional credit card purchases for purchases, especially among young Australians.

She explained that most people don’t consider these accounts credit obligations and are often unaware of it when applying to home loans.

Dodd said that it was important for pay-later users to ensure they don’t block their ability to apply to for a loan to buy a home.

She advised that borrowers not only should use credit responsibly and avoid excessive borrowing but also to talk to a broker to learn how to declare all necessary information to complete a mortgage application.

A solid repayment history is important in order to ensure they are not negatively affected by any pay-later plans. Borrowers should have a clean credit history in order to avoid problems when applying for a loan.

Similar to late-year issues about how food delivery can derail loan applications. Gemmill Homes managing director Craig Gemmill stated, “It is becoming increasingly difficult to get approval for homes.” Lenders may be concerned by even their dining choices.

“Banks haven’t changed their guidelines, but they are just applying them far more stringently now,” she said.