Stick to your buying budget

November 28, 2016
Ali Batten

Two key steps make it easy to find a home that fits your budget as well as your lifestyle.

Your new property needs to tick all the boxes in terms of being a good fit for your lifestyle and one of the most important considerations should be whether you can comfortably afford to pay off your new home. This is where sticking to a purchase budget is imperative to your future.
Staying within your budget is especially important if you’re the highest bidder at an auction. Exceed your budget here and it’s easy to become financially skewered if you cannot secure loan approval to complete the transaction.

Even if you’re buying through private treaty, staying within your buying budget is important. It means you won’t face the possibility of losing a deposit if you cannot secure a loan to cover the rest of the purchase price after you’ve exchanged contracts.So, what’s involved in determining your buying budget?

1. Know your borrowing capacity

Your borrowing capacity is how much lenders are prepared to offer you as a loan based on your income, household expenses, and even the limit on your credit cards.
You may come across online calculators that provide a figure for your borrowing capacity. These can be useful in providing a very broad figure. But it can be dangerous to rely on these calculators alone as they don’t consider all your details.
Moreover, different lenders impose different criteria on how much you can borrow. That’s why it is important to gather all of your information so we can then have a look at all the different lenders, and then determine what will be the correct fit for your situation.

2. Arrange loan pre-approval

Your borrowing capacity is extremely useful. But one of the most effective ways to stick to your buying budget is by having loan pre-approval in place.
It’s a really concrete step, and having home loan pre-approval often deters buyers from looking at listed properties outside their buying budget.

Call Suzanne, Owun or Costa on 02 9517 1818, or email newtown1@mortgagechoice.com.au to discuss your options. Or, if you feel like dropping in at our office, we are located at Suite 106, Flourmill Studios, 3 Gladstone Street, Newtown 2042. Be sure to share our blog on Facebook and Twitter and let others join the conversation!

Posted in: Home loans

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