We help people to understand what they can borrow comfortably for their first home purchase every day.
Folks always seem to think at first that there’s more involved in this process than there really is.
It’s pretty simple actually.
As part of our ongoing series on getting prepped for your first home purchase, we’d like to go through some of the basics when it comes to lending.
Here are four points you should get in order when establishing an estimate of your borrowing power:
1. Decide who’s purchasing
Will it just be you purchasing? Or are you buying jointly with a partner, family member or friend? Have you been fortunate enough to have someone offer to go guarantor for your loan? These factors will all be pivotal to your lending application.
2. Find a reliable indicator of your income
Your gross income as it appears on your last group certificate normally does the trick. If you are self-employed, generally your last two years’ tax returns will be taken into account. Other details like how long you have been employed, and on what basis will also be important to your lender.
3. Have a deposit saved
Have you been busy saving away? How much do you have set aside? It doesn’t matter if the sum isn’t huge at this point. Your Lending Specialist will be able to advise you on how to best leverage what you have, including how the First Home Owners Grant can be used. It might be possible for you to find a borrowing scenario that will allow a low deposit.
4. Understand your debts and credit history
Do you have credit cards? Car loans? Personal debts? You’ll just need to have a concept of what your personal borrowing limits are presently and what you owe. These limits can have a huge impact on what you are able to borrow. Your Lending Specialist will be able to advise you on the best course of action to reduce your debts and optimise your home loan potential.
That’s all!
With these simple details, our Lending Specialists can give you an approximate idea of your borrowing capacity.
Once you have a snapshot of your lending capacity, it’s easy for the team to work with you to put lending pre-approval in place. This step will require a few bits of additional paperwork, and allows you to shop with confidence, knowing the exact amount a lender will finance for your purchase.
Put the wheels in motion today.
Disclaimer: This communication has been prepared on a general advice basis only. The information has not been prepared to take into account your specific objectives, needs and financial situation. The information may not be appropriate to your individual needs and you should seek advice from your financial adviser before making any investment decisions.