January 15, 2017
Property investing how to get started part two.
In the last blog I said I was going to talk about what factors your mortgage broker will look at when trying to maximise your borrowing power. These are better known as “the 4 C’s” in the finance world. They are Capacity, Collateral, Character and Capital.
Capacity is your ability to repay the loan.
The banks will look at your net income and potential rental income if you’re an investor, they will also consider your employment duration, whether you’re on probation, and your terms of employment (fulltime, part time, casual, and contractor)
They will also look at your expenses. Factors include living expenses, credit card limits, personal loans, car loans, leases and other home loans.
Collateral is what assets you’re going to offer as security.
Assets include the property you’re purchasing, other property and investments you have acquired and your cash deposit. The more collateral you have to offer the more favourable your situation will be. Different lenders require varying amounts of collateral. Your local mortgage choice broker has a large panel of lender’s which allows us the ability to find the right lender and home loan for your specific situation.
Character is your willingness to repay.
Lenders will look at your account history, paying attention to your positive and negative payment history on loans and credit cards as well as whether you have gone into overdraft.
They will gain access to your credit report paying particular attention to bankruptcy’s, paid and unpaid defaults and court writs. If you have found yourself in this situation it’s not all bad news there are lender’s that will consider applicants with unfavourable credit history.
Capital is what you are worth.
This is more of an overriding summary of your financial position, which takes into account your assets and liabilities.
Contact Tara your local Rockingham mortgage broker to find out what we can offer you.
Ph: 0447277321 firstname.lastname@example.org