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The amount that you can borrow to buy a property is determined by a number of factors. We have broken it down to 5 simple C's.
How these factors determine how much you can borrow? Your income and commitments Your lifestyle and living expenses Your property Your loan interest rate, the term and type Any assets you offer as security (for example, another property) Your credit history Your income and commitments Before going ahead with a loan, it is important to have your repayment capacity assessed. If you are applying for the loan jointly with another person, your repayment capacity may be greater, which can mean greater borrowing power. Your commitment level takes into account all debts currently outstanding, including credit and store cards, personal loans, and car hire purchase or lease agreements, and any other ongoing payment commitments. Your lifestyle and living expenses You'll need to take a close look at your living expenses, to ensure you can realistically afford the repayments and maintain a standard of living you are comfortable with. Your property The amount you can borrow depends on the value of your property. This value is determined by your lender, and is not necessarily the advertised or purchase price of a property. Predominantly using residential security, ensuring the security type pledged is acceptable by the bank. This could vary from acreage, rural residential, inner- city, high-density, farms, income producing properties etc. Quality of the property and its condition and ensuring it meets the LVR requirements. Your loan interest rate, the term and type The amount you can borrow may also depend on the interest rate and the term of your loan. The lower the interest rate, the lower your repayments will be. A longer-term loan will mean lower repayments, but a shorter-term loan may save you interest. You need to think carefully about what is most important to you. Your credit history Your credit history is also very important and will be checked by a lender when assessing your loan application. It takes into account your previous record of repaying loans and credit cards. If you are unsure about your credit history, it is worth checking before applying for a loan. From there, you can take steps to improve or correct it if necessary - for example, by clearing an unpaid debt. To obtain a copy of your credit reference report, you can contact Veda Advantage Ltd at the following address below or visit www.mycreditfile.com.au Public Access Division Veda Advantage Ltd PO Box 964 North Sydney NSW 2059 Ph: (02) 9464 6000 |
