Navigating the World of Mortgages: What borrowing capability do you have?
August 1, 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/
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