HOW MUCH CAN YOU REALLY AFFORD?

Reception • Oct 15, 2017

The choices you make when taking out a mortgage have long lasting implications – so you need to approach borrowing with a healthy attitude. When determining your borrowing capability, start by measuring your income against expenses, including potential mortgage repayments. While everyone’s circumstances and expenses are different, a good rule of thumb is that no more than 35 per cent of your gross monthly income should go towards servicing your mortgage. Lenders will also need to assess your circumstances to work out how much to lend you.

35 per cent of your monthly income should go towards servicing your mortgage

As a general rule, the bigger deposit you have and the higher your income, the more they should be willing to lend. All lenders will need to determine a loan suitable to your circumstances but mortgage managers can get to know your circumstances personally – and may have a little more flexibility than the banks to consider applicants on a case-by-case basis.


Here are some factors to take into account when determining how much you should borrow.


How much debt can I handle?


Don’t over commit. Borrowing too much can be a big strain on your personal life and lifestyle. Think about
what aspects of your lifestyle you may be willing to give up, and those that you can’t.

 


Am I being realistic?


Houses are like stepping stones – it’s probably best to start with something affordable and move towards your dream home as your personal earning capacity and equity grows.

 


What are my plans?


Think about what the future holds – both personally and financially. Are you a one or two income household and is this likely to change in the future?

 


What about interest rates?


Consider how any rate rise will impact on your ability to make repayments and factor that in when setting your borrowing limits. And don’t forget, there are added extras when purchasing a house, for example, stamp duty and mortgage duty, relevant property inspections, solicitors and application fees, as well as ongoing commitments including council rates, possible strata or body corporate costs and utility bills. Consider these costs when determining how much you can borrow.

 

Want to work out your borrowing capacity?


Simply click here and use our in-house Borrowing Power Calculator to determine how much you can borrow! Or email  info@futurefinancegroup.com.au to organise an appointment with one of our incredible Broker’s.

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Navigating the World of Mortgages: What borrowing capability do you have?

01 Aug, 2023
Navigating the World of Mortgages: What borrowing capability do you have? Deciding to buy a house is an exciting milestone, and we're here to accompany you through the intricate world of mortgages. With the changes to interest rates that have happened over the last twelve months, it's essential that we are prepared and approach borrowing with a healthy attitude, as your choices now will have long-lasting implications, so let's ensure you're well-prepared for this homeowner journey. What should I consider when considering my borrowing limits? First, let's figure out how much you can borrow without sacrificing your peace of mind and daily joys. The key here is to measure your income against your expenses, including the potential mortgage repayments. A general rule of thumb: try to keep your mortgage repayments to no more than 35% of your gross monthly income. When it comes to borrowing generally, the higher your deposit and the higher your income, the more they should be willing to lend. The good news is we have more flexibility as mortgage brokers than the big banks, so we can look at your circumstances closer. Now, let's discuss some essential factors to consider when figuring out your borrowing limits. How much debt can you handle? Think about your lifestyle and what you're willing to give up versus what's non-negotiable. Be realistic about your dream home. Start with something affordable and gradually work your way up as your earnings grow and your equity increases. Think about the future. Are you planning to start a family, change jobs, or experience significant life changes? Factor those possibilities into your calculations. Keep an eye on interest rates and consider how further rises might affect your ability to make repayments. Reminder; A reminder that when purchasing a property, you will also need to factor in further expenses, such as, pay stamp duty, pest & building inspections, conveyancer fees, application fees, council rates, possible strata or body corporate costs, and utility bills to factor in. In Summary We'll help you evaluate your financial situation, research and compare over thirty lenders and loan options, and gather the necessary documentation to help you whether you are purchasing your first home or refinancing. What should I do next? Our dedicated team is committed to nurturing your financial well-being and helping you achieve a stronger and more secure future. Call our office on (03) 8657 8664 to organise a time to chat, and we also invite you to take advantage of our free resources by heading to our website. https://www.futurefinancegroup.com.au/

Refinancing: What Are Your Options As A Homeowner?

By Bree Jones • 19 Jun, 2023
At Future Finance Group, we understand that financial hardship has become a pressing concern for many homeowners across the country, including Melbourne. We want to help you explore the benefits of refinancing your mortgage. By assessing the right time to refinance and understanding the steps involved, we can guide you to potentially save money, access improved loan terms, and secure a more favourable financial future. What are the Benefits of Refinancing? During these challenging times, refinancing your mortgage can bring meaningful advantages. Firstly, it may allow you to take advantage of lower interest rates, reducing your monthly mortgage payments and offering much-needed relief. Additionally, refinancing allows switching from a variable-rate to a fixed-rate mortgage, ensuring stability and protection against future rate increases. By consolidating high-interest debts, you can streamline your finances and gain more control over your monthly obligations. Also, refinancing can unlock equity in your home, providing funds for essential expenses or other financial goals. Assessing the Right Time to Refinance Working out when to refinance can be challenging, mainly because we do not know what the future will bring. We are here to look at your personalised options and work with you to ensure your financial security. We can consider many factors, such as your credit score, home equity, and employment stability, to give you informed options. Steps Involved in Refinancing and Potential Cost Savings : We are here from the beginning to the end and strive to simplify the refinancing process for you. We'll help you evaluate your financial situation, research and compare over thirty lenders and loan options, and gather the necessary documentation. Our ultimate goal is to help you secure better terms, rates, and long-term cost savings to ease the pressure on you and your family. In Summary In these challenging times, exploring refinancing options can provide much-needed relief and open up financial opportunities for you as a homeowner. What should I do next? Our dedicated team is committed to nurturing your financial well-being and helping you achieve a stronger and more secure future. Call our office on (03) 8657 8664 to organise a time to chat, and we also invite you to take advantage of our free resources by heading to our website. https://www.futurefinancegroup.com.au/
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