A common question anyone entering the market will ask a mortgage broker and the answer depends on several key factors:
Current and future income
Your current income, including salary, bonuses, commissions, and any other sources of earnings, plays a significant role. Additionally, lenders may consider your future income prospects, such as expected salary increases or career advancements
Expenses
An assessment of your expenses, including rent or loan payments, utility bills, insurance premiums, and other financial obligations, helps determine your borrowing capacity. Lenders need to ensure that your income comfortably covers these expenses.
Deposit size or help from relative
The size of your deposit or any financial assistance from relatives or guarantors can impact the amount you can borrow. A larger deposit often translates to a lower loan-to-value ratio (LVR) and may improve your borrowing capacity.
Credit history
Lenders assess your credit history to gauge your creditworthiness. A healthy credit score and positive credit history open doors to competitive interest rates and borrowing options. Conversely, a poor credit history may limit your borrowing capacity or result in higher interest rates.
Financial goals
Before we determine your borrowing capacity, we like to understand your financial goals, both short-term and long-term. This helps us consider whether your borrowing aligns with your financial objectives and affordability. We aim to ensure that the loan amount is manageable within your budget and doesn’t strain your finances.
Any existing assets and savings history
Assets, such as savings, investments, property, or vehicles, contribute to your overall financial position. Lenders may consider these assets when assessing your borrowing capacity. Additionally, a history of consistent savings showcases financial discipline and stability.
Speaking to one of our Lending Association mortgage brokers is the first step to unlocking the intricacies of borrowing capacity. Upon your initial consultation, our team will delve into your goals, assess your affordability and craft a personalised roadmap to your dream property.
In a high interest rate environment our priority is to provide you with a clear understanding of how much you can comfortably afford and offer solutions that support your long-term objectives.
With our extensive network of lenders, each offering a variety of rates and conditions, we’re equipped to navigate the market on your behalf. Our team stays updated with the latest offerings, allowing us to tailor solutions based on your situation and goals and devise a plan that not only meets your current needs but also sets a clear path for your future.
Curious about how much you can borrow and what options are available?
Disclaimer: Any information provided herein is of a general nature only. No consideration has been taken into your objectives, needs or financial situation. Before acting on this information you should consider if it is appropriate for your situation.
