When working out your borrowing capacity, lenders will look at three key areas:
How much incoming money the borrower earns on a regular basis is the most important factor. You incoming cashflow should also be consistent for at least 6 months. If you are self employed, there are a few extra steps required to verify your earnings.
2. REGULAR DEBTS:
Everyone has different living expenses and demands. Cutting out home delivery meals, take-away coffees and expensive haircuts is a good idea in the lead up to your loan application. With fewer expenses, lenders will have greater confidence that you can cover your repayments.
If you have any debts, pay them off now!
Lenders need to know that your repayments won’t inhibit you from financially being able to support those that need you. Be realistic about your family’s living costs and map them out so you know how much you can afford each month.
READY FOR THE NEXT STEP?
Everyone’s circumstances are different so it’s really important to have a good mortgage broker to guide you through your home loan application. They may pick up on something that you’ve missed and this could be the difference between securing that dream apartment or settling for something second-rate.