Impact of Credit Cards on your Home Loan | Stellar Finance Group
Your credit card limit can have a significant impact on your home loan application. Lenders will consider your credit limit, along with other factors such as your income, expenses, and credit history, when assessing your borrowing capacity.
Lenders typically assume that you could potentially max out your credit cards, even if you don’t currently have a balance. This is because they want to be sure that you can still afford your home loan repayments, even if you have other financial commitments.
As a result, having a high credit card limit can reduce your borrowing capacity for a home loan. For example, if you have a credit card limit of $50,000, your lender may reduce your borrowing capacity by $250,000-$300,000.
There are a few things you can do to improve your chances of getting a home loan approval and maximizing your borrowing capacity:
⚫ Reduce your credit card limits. If you don’t need a high credit limit, consider reducing it. This will show lenders that you are responsible with your credit and that you are not a high-risk borrower.
⚫ Pay your credit card bills in full and on time. This will help you to maintain a good credit score, which is another important factor that lenders consider when assessing home loan applications.
⚫ Avoid opening new credit accounts in the lead-up to your home loan application. This could raise a red flag for lenders and suggest that you are taking on too much debt.
Link to Book a Chat: www.savvyfinancegroup.com.au/meet
Subscribe to this channel for all things mortgages!
You can also follow Savvy Finance Group here:
Facebook: savvyfinancegroup | Tiktok: savvyfinancegroup | Instagram: savvyfinancegroup |
#financeapproval #mortgagebroker #financebroker #homeloan #personalfinance #homeownership #mortgagerates #mortgagelender #mortgagetips #mortgagerefinance #mortgages #homebuyer #mortgage #credit #debt #lender #mistakes #borrowingcapacity #creditutilization #creditreport #financialliteracy #moneytips #reducecreditcardlimit #firsttimehomebuyertips #homebuyingtips #homebuyers #firsttimehomebuyer #homeloanapplication
