Determining Your Borrowing Capacity | Stellar Finance Group It is important to determine your borrowing capacity before you apply for a loan. This will help you to understand how much money you can afford to borrow and to avoid overextending yourself financially.
_________________________________________________________________________________
If you borrow more money than you can afford, you may have difficulty making your loan repayments. This could lead to late payments, damage to your credit rating, and even foreclosure or bankruptcy.
_________________________________________________________________________________
It is also important to note that your borrowing capacity is not the same as your loan approval amount. Even if you have a high borrowing capacity, a lender may not approve you for a loan if you have other financial problems, such as a poor credit history or a high debt-to-income ratio.
_________________________________________________________________________________
Lenders use a variety of factors to determine your borrowing capacity, including:
_________________________________________________________________________________
⚫ Income: Lenders want to make sure that you have enough income to comfortably afford your monthly loan repayments. They will typically consider your gross income (before taxes) and your net income (after taxes).
_________________________________________________________________________________
⚫ Expenses: Lenders will also consider your monthly expenses, such as rent, mortgage, utilities, food, transportation, and debt payments. They want to make sure that you have enough money left over each month to make your loan repayments on time.
_________________________________________________________________________________
⚫ Credit history: Your credit history shows how well you have managed your debt in the past. Lenders will look at your credit score, payment history, and the amount of debt you currently have outstanding.
_________________________________________________________________________________
⚫ Assets: Lenders may also consider your assets, such as savings, investments, and real estate. This can help them to assess your ability to repay the loan if you experience financial difficulties.
_________________________________________________________________________________
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
_________________________________________________________________________________
Thanks for watching! Let me know what you think in the comments below.
_________________________________________________________________________________
#loanapproval #financialplanning #debt #budgeting #credit #creditworthiness #mortgageapplication #homeloan #personalfinance #financialfreedom #moneytips #financeapproval #interestrates #budget #finance #financebroker #mortgage #mumsofinstagram #fyp #saving #realestate #education #student #uni #millennial #savingmoney #rentfree
