The banks legally need to assess you before they can issue you with a mortgage or home loan product, to know your ability whether your finances will allow you to tend to the entire life of the loan and also secure a property through the means of a deposit.
Each prospective buyer will be compared against the very well known ‘borrowing power’ which will be greatly determined by their financial situation at the time of lodging a home loan application.
There is a home loan calculator which will do this job for you. It will actually calculate your repayment capacity and thus the borrowing power.
But before we get into the actual usage of this calculator, let us first understand the ways in which you can increase your borrowing power.
How can I increase my borrowing power?
You should consider changing your circumstances so you can qualify for a larger loan if you can’t borrow a desired amount.
- Cancel your credit cards
- Switch your current loans to interest only (acceptable to some lenders)
- Fix the rate on your current loans (acceptable to some lenders)
- Choose a lender that can include overtime, bonus and other income
- Choose a lender that allows you to borrow more
It’s a good idea to become versed on your home loan borrowing power to get a head start, as early as possible, with a rough guide provided through this calculator.
How to access the home loan calculator?
- Click on Start a Borrowing Capacity
- In the Calculators tab, select Borrowing Capacity in the left-hand panel.
- Click New Borrowing Capacity
From and Opportunity
- Open the Opportunity in the CRM tab.
- Select Calculations from the left-hand panel.
- Click the green plus symbol to open a new Borrowing Capacity
How to do the Calculation
- The screen will appear
- Enter the applicant’s details
- The Income and Expenses except for Real Estate income, for all applicants
- And then enter the Existing Real Estate details
- To add Rental Income for a future Investment property or Investment property being refinanced. Just add a New Asset and only complete the Rental Income Frequency and Amount. Leave the Loan details fields blank.
- Apply the ownership % for each applicant.
- Click on Calculate and the results will populate
How can a mortgage broker help?
A qualified mortgage best determines your borrowing capacity prior to you applying for a home loan through a lender as the broker holds the valuable tools and industry insight.
Mortgage brokers clearly understand the set of criteria that each different lender deploys as they are also connected to a range of different lenders within the market.
This makes it easy for them to determine whether a borrower would be eligible for a home loan. They are the live mortgage calculators.
So, it is very well advised to take professional help before applying for a loan or accessing the loan repayment calculator.
You can contact APW Finance for more information on how to increase the borrowing capacity for a home loan.
Experienced Director with a demonstrated history of working in the accounting industry. Skilled in Tax Preparation, Self Managed Superannuation Funds (SMSF), Accounting, Income Tax, and Tax. Strong professional with a Master of Applied Finance focused in Taxation from University of Western Sydney.