How Much Can I Borrow?
If you are planning to buy your first home, you are probably wondering how much money you will be able to borrow.
Mortgages can vary considerably between lenders and products, so it is important that you not only assess how much you can afford to repay, but also which home loan is right for you.
A great way to get started is to evaluate your present financial commitments - this can include your income and how much you are currently setting aside in savings each month, as well as your regular outgoing expenses, such as utility bills, food, your car, entertainment and other miscellaneous costs.
While your mortgage broker will also make this assessment, it can be a wise idea to do your own calculations first so you know exactly where you stand and what you can afford.
Mortgage calculators are a great online tool that can give you a quick and accurate picture of how much money you might be able to borrow, and can also help you determine a repayment schedule that fits in with your long-term plans.
Consumer watchdog Choice also recommends giving yourself a ‘buffer’ by anticipating an interest rate rise of up to two per cent when you calculate how much money you plan to borrow. This can help you assess whether you can still meet your repayments comfortably even if rates rise.
To get more detailed information on your situation, talk to a Loan Market mortgage broker today