Your borrowing capacity is a MASSIVELY important consideration when buying a home or an investment property.
It will affect where and what you can buy, and how much you can spend on the property.
The amount you can afford to borrow will vary from lender to lender. Coronis Finance has access to over 40 lenders and off the market interest rates. Get in touch with your local Coronis Mortgage Broker to ensure you’re getting the most out of your borrowing capacity.
But first, here are 9 smart ways you can increase your borrowing capacity before getting in front of a broker:
Know your credit score
Your lender will check your credit score to determine if you’re in a stable financial situation. If you’re one step ahead of them, you can work on improving your score before they said no... order your credit report here & now
Reduce your debts
Unsecured debts like credit cards or personal loans are very expensive and reduce the amount you can repay on a mortgage. You can work hard to reduce these high interest rate debts which in turn, will increase your borrowing capacity.
A credit card debt dor instance can reduce your Borrowing Capacity by as much as as 5 times its amount - a $12,000 credit card could reduce your bowrrowing capacity by as much as $60,000 in home loan amount
Reduce excess credit limits
Do you have multiple credit cards, and some you don’t even use? Get rid of them!
The lender will count the limit of these credit cards as debt. For example, if you have a $5,000 credit card and another $7,000 credit card, the lender will recognise you to have $12,000 debt.
Choose the right mortgage product
When shopping for a mortgage to suit you, consider the features of the loan product. A mortgage broker will take you through every loan, step by step and ensure the loan you choose, is best for you.
Organise your finance affairs
Ensure all your information and tax returns are up to date. It will save you time when you need it most.
Save more money for your deposit
If you have a consistent saving record, lenders will have proof you are capable of making regular mortgage repayments.
Cut your expenses
Other than your income, your lender will also consider all expenses, such as your rent utility bills, school fees, childcare etc.
The lender will lilkely request and look through your bank statements and look at where & how you are speding money.. being frugal in the few months' leading to a loan application can be a smart move.
Consider splitting liabilities
Consider splitting the expenses of buying a home with your partner, or friend. For example, if you and your partner are able to financially support the mortgage, your borrowing power may be increased and your partner will not be counted as a dependent in the application.
Increase your income
This is a sure way to increase your borrowing power. Whether you work an extra shift, ask for a promotion or get a second job your income will benefit & your borrowing capacity will increase.
Calculate your borrowing capacity
Alternatively, click here to get in touch with your local mortgage broker today.