Borrowing capacity: Focus your property search

By the resi financial blog team, 03 February 2014

Borrowinf capacity

Before you approach the real estate market, getting in contact with a mortgage lender could be a good idea in order to discuss the various financial options available to you. After all, finding out the basics of your home loan options could help to streamline your real estate experience.

For example, one thing that can help to make your property experience easier is to figure out your borrowing capacity. As the name suggests, this is an estimate about the amount of money you can borrow.

Naturally, this could influence your entire property search. Knowing how much you can borrow can narrow down the scope of your search and place parametres on your options, helping to focus you in the right direction.

Nobody wants to fall head-over-heels in love with a property only to find out later that their financial situation stops them from ever standing a chance to purchase it. However, working within your limitations will help you to find the perfect home without overstretching yourself.

The size of your deposit is one factor that can influence your borrowing capacity. Lenders want to be sure that who they're trusting with their money will be able to make their repayments on time and in full, so providing them with a relatively large deposit goes a long way to proving your financial strength.

In much the same vein, getting rid of any outstanding debts will help to increase your esteem in their eyes, potentially leading to a more favourable outcome and a higher borrowing capacity.

These are just some of the things you can do to help maximise your borrowing capacity. But the best thing to do is get in contact with a lending professional and discuss the best home loan options available to you.

Categories: Home Loans, Personal Finance