Before you get carried away, talk to us about realistic loan amounts.
Ah, the old million dollar question.. or the half a million dollar question, or perhaps the $250,000 dollar question….!
How much you borrow really does depend on your income, your financial goals, and the length of time that you want to be paying off a mortgage. Your borrowing capacity can be worked out fairly quickly by one of our Brisbane Mortgage Brokers . Remember as a child begging your parents for more pocket money so that you could buy that Spice Girls CD, get the latest stick-on tattoo or buy your first car? It doesn’t need to be that hard to get approval for the amount that you want.
Let’s look at the main points to consider when you are calculating your borrowing capacity.:
Your income and expenses
You need to consider your income as well as your expenses. Comparing expenses and income allows you to get a realistic picture of your finances. You may have large expenses coming up which you need to consider such as buying a new car, holidays, school fees, etc. Or your income may be due a major boost through a promotion at work, or a second job.
Estimated repayments
Each lender will asses your borrowing capacity based upon how much you can afford to repay each month. If you can afford larger repayments, you will be able to borrow more. But if you can only afford small, minimum repayments, maybe due to other costly monthly expenses, then you will not be able to borrow as much.
Assets and liabilities
If you have considerable assets or liabilities, this can affect your borrowing limits too. Lenders are looking to see that you own more than you are borrowing, so your car, savings, investments and furniture can all be used to build up your credit rating. You may have equity in an existing property which can be used to increase the loan amount for this next loan. Or you may have considerable liabilities such as personal debts, which can make lenders nervous about lending you large amounts.
Your lifestyle
You may have a good income, but also an expensive lifestyle! If your lifestyle is one that costs you large amounts each month, this will affect your ability to keep up repayments.
Your deposit
If you have a deposit saved, lenders will be more inclined to lend more. Obviously the more deposit you have, the better your chances. Usually somewhere between 5% to 20% of the purchase price is needed.
Don’t feel daunted by all this information. Talk to a mortgage broker today and in a few minutes, find out how much you can borrow. Call us on  .
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