Smart Ways for First Home Buyers to Increase their Borrowing Capacity

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Portrait Of Excited Couple Standing Outside New Home

Whether you’re beginning to save for your first home or are already looking through the market, it’s important that you keep your finances in mind throughout the process.  First Home Buyers should think of two things, how much deposit you need to save and have and how much you can borrow.  

To buy a block of land in Marsden Park or Box Hill in the northwest or any of the southwest suburbs such as Leppington or Oran Park will cost you $400,000 minimum.  To build a house will set you back $300,000 if it’s a single storey house or $400,000 if it’s a two-level home. All up, a house will cost you between $700,000 to $800,000.

To afford this, a first home buyer couple with no kids will have to be on a combined income of $150,000 to be able to borrow at least 95% of this purchase price.  Below are ways you can stretch your borrowing capacity.

Not everyone knows that credit card limits affect borrowing capacity

Most banks consider the full outstanding potential debt on the credit card when they’re assessing your borrowing capacity.  The best thing you can do is to reduce your credit card limits or cancel all of your credit cards altogether. If there are existing balances in the credit cards and you are unable to pay these balances immediately, consider consolidating all these debts into one personal loan.  

If you receive overtime pay, bonuses or commission, provide last 2 years’ group certificate

Choose lenders that will take 100% of your overtime income and bonuses as opposed to most lenders that will only take 80% of this income.  The more income you can use to service the loan, the higher the borrowing capacity.

Get a second job

There are lenders who will consider a 2nd income or casual income as long as you have been in that employment for at least 6 months.  More income means higher loan amount. Most of my clients who are in the nursing profession with two or three jobs can potentially borrow more if all incomes are combined.


Keep a tight watch on your expenses

Banks currently look at grocery bills, medical expenses and utility bills to assess a borrower’s household expenses.  Expenses such as UberEats, Netflix, your online shopping will be scrutinised closely by lenders. A high living expense means less borrowing capacity.

Borrowing capacity varies from lender to lender depending on the assessment rate. 

A finance broker knows which lender’s calculator is generous and which are not. Let your mortgage broker crunch the numbers for you.

How do your living expenses affect your borrowing capacity?


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We are a team of qualified professionals who have been in the mortgage broking industry for the last 10 years. We are also property investors who have accrued the knowledge and experience to help you achieve your property goals.

Learn the right strategy and find the resources to empower you to buy your first home, to refinance or to purchase your first investment property. Our team of brokers can guide you through the home buying process and answer your questions,
➔ Where and what you can buy?
➔ How much deposit will you need?
➔ How much can you borrow?
➔ What are all the other costs involved?
➔ How can you repay my mortgage quickly?
Our role as your mortgage broker is to guide you through the process to ensure that all your needs and options are considered.