Hello Chasers,
Real estate investing is all about financial finesse.
Your borrowing capacity is like your secret weapon: the bigger it is, the bigger the property you can conquer!
But before you start picturing yourself lounging in a beachfront mansion, hold your horses. Lenders, the gatekeepers of your property dreams, need to be convinced you can handle the heat.
So, what determines your borrowing capacity?
Buckle up for a ride through the key factors:
- Income Sources: Show Me the Money!
The steadier your income, the happier the lender. Salaries are great, but bonus points for multiple streams like rentals or investments! Remember, consistent income = ability to repay, and that’s music to their ears.
- Debt Diet: Less is More! ⚖️
Credit card debt? Car loans? These are red flags for lenders. They see them as money vampires sucking up your cash flow, making it harder to repay your new loan. So, trim the fat before applying!
- Job History: Stability is King!
Lenders love a loyal employee. A consistent work history shows reliability and steady income. Self-employed? No worries! Show them two years of tax returns proving your hustle is real.
- Interest Rates & Loan Terms: The Balancing Act! ⚖️
Higher interest rates and longer loan terms mean bigger repayments, shrinking your borrowing power. Think of it like buying a car: lower monthly payments, more car (or property) you can afford!
A mortgage broker can be your knight in shining armor, finding the best loan deal for your situation. ️
- The Deposit: Put Your Skin in the Game!
Lenders want you to have “skin in the game,” hence the deposit. The higher the percentage you put down, the lower the risk for them, potentially leading to a lower interest rate and greater borrowing capacity.
Don’t forget to check out that eligibility for accessing government schemes that help reduce your deposit requirement!
Remember: This is just a taste of the property finance game. For personalised advice, contact our mortgage broker on 03-55612643 – your ultimate guide to unlocking your borrowing potential and turning your property dreams into reality!
Have a great day!
General advice disclaimer
The advice provided is general advice only as, in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.
Only lending advice provided by Ceebeks Financial Solutions is associated with Outsource Financial Ltd Credit Representative 396061. Chris Beks is a director of Ceebeks Financial Solutions and a Credit Representative (credit representative no. 396061) of Outsource Financial Ltd Limited ABN 42 131 090 705; Licence Number 384324 an independently owned and operated Aggregator, and is authorised to provide personal credit advice. For more information, you can read our Credit Guide, or contact us for more information on our available services.
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