Getting different answers from different home loan lenders?Home loan lenders use many factors to work out what you can afford to borrow. Each has their own policies, resulting in different answers. Below are some of the key criteria common to all lenders. IncomeYour income is the key to how much you can borrow. Your home loan lender will look at the amount of income you earn and also the type and regularity. Part-time earnings or overtime will be viewed more favourably if earned consistently over an extended time. Your present expenses and debtsWhen reviewing your ability to repay a loan, home loan lenders want to know that you can also meet your other commitments, including credit cards and personal or car loans. It may be wise to minimise or reduce your other loans and expenses before seeking home finance. Also consider asking your lender how student loan calculator your maximum borrowing limit may change if you consolidate any debts with your home loan. The lower your other loans and expenses, the more income you can allocate to home loan repayments – increasing the amount you can borrow. What type of borrower are you? To gauge what you can afford to pay, mortgage lenders consider the kind of work you do and the number of people linked to your application, including children and any other dependants. Loan purposeThe amount you can borrow changes according to the purpose of your loan.Property investors can often borrow more than owner occupiers with similar criteria this is because lenders calculate the benefits from negative gearing when doing the calculations. Location and property typeProperty prices do fluctuate and lenders will often limit the amount they will lend in certain areas and property types.
