It continues to be a highly competitive real estate market in Brisbane, especially throughout the Eastern suburbs of Brisbane. There are great investment opportunities in our local area but in our experience, it pays to do your research and plan ahead.
As a mortgage broker, one of our primary goals is to create the best possible borrowing power, while ensuring that our clients are comfortable with their repayments both now and in the future.
Whether you're a first home buyer, upgrading or adding an investment property to your portfolio, understanding how to strengthen your borrowing capacity can make a significant difference in your ability to secure finance approval when it comes to buying your property.
Here are some practical tips to increase your borrowing power:
Reduce Unused Credit Card Limits:
Unused or unnecessary credit card limits will reduce your borrowing capacity. Lenders consider your total available credit when assessing your ability to repay a mortgage. By reducing or eliminating unused credit card limits, you can demonstrate responsible financial management and potentially increase your borrowing power.
Consolidate Loans into Your Home Loan:
Consider consolidating personal or car loans into your home loan. This strategy stretches your debt over a longer term, resulting in lower minimum payments. This is not suitable in all cases. As an example, its never a good idea to be paying off a car over 15yrs. However, keeping this in mind, you then can choose to accelerate the repayments.
And While this may simplify things, the trade-off is that this option will likely increase the amount of interest and therefore the cost of the personal/car loan over the longer period – so it pays to get good advice and consider the implications of this strategy.
Cut Non-Essential Expenses:
Review your monthly expenses and identify non-essential items that can be reduced or eliminated. This could include subscriptions to streaming services, gaming platforms, club memberships, or gym memberships. Cutting back on discretionary spending demonstrates financial discipline and can positively impact your borrowing capacity.
Cancel Buy Now Pay Later (BNPL) Services:
While convenient, Buy Now Pay Later (BNPL) services can impact your borrowing power. Lenders may view outstanding BNPL balances as additional financial commitments, potentially reducing the amount you can borrow. Consider cancelling BNPL services and focusing on reducing existing balances to strengthen your financial position.
By implementing these strategies, you can optimise your borrowing power and increase your chances of securing the mortgage you need to achieve your property goals. Remember, your mortgage broker is here to help guide you through the process and identify additional opportunities to strengthen your financial position.
Contact us today to discuss your borrowing needs and develop a personalised strategy for success.
If you'd like a more personalised recommendation, feel free to reach out. You can get started in understanding your borrowing capacity by using one of our calculators here:
Disclaimer:
Astute Financial Management Pty Ltd | ACN 093 587 010 | Australian Credit Licence 364253 | Davgan Insurance & Wealth Pty. Ltd. T/As Astute East Brisbane Corporate Authorised Representative (425641) of Alliance Wealth Pty Ltd | ABN 93 161 647 007 | AFSL 449221. www.centrepointalliance.com.au/aw | General Insurance provided by Astute Insurance Pty Ltd | ABN 59 622 582 236 | Authorised Representative of Ausure Pty Ltd ABN 94 096 971 854 AFSL 238433. Health Insurance products are underwritten by St Luke’s Medical and Hospital Benefits Association ACN 009 479 618 (St.LukesHealth), a registered private health insurer, [trading as Astute Simplicity Health] and members are introduced by Astute Financial Management Pty Ltd or related entities (collectively known as Astute) for which Astute receives a commission.
General Advice Warning:
This communication contains general information only and in no way constitutes the provision of professional advice, nor should it be relied on as a substitute for financial, credit, accounting, legal or other professional advice. We have not taken into account your financial situation, investment objectives or particular needs. Before making an investment or financial decision, a person must seek appropriate independent professional advice and also consider whether this information is appropriate to their needs, objectives and circumstances. The author as well as their representatives, agents and employees give no guarantees and make no representations, express or implied, as to the accuracy, currency, completeness or suitability of the information contained in this document. Nor do they accept any liability whatsoever as a result of any information herein being incorrect, incomplete or unsuitable or as a result of a person in any way using or relying on the information herein.