Planning to buy your very first home soon? Here are five tips to boost your borrowing capacity.
#1, Reduce your debts and your monthly payments. This will show lenders a positive credit history. Fewer expenses mean you are being smart about your money and responsible when it comes to repayments.
#2, If you have credit cards and overdrafts that you don’t owe money on – close the accounts down. The total credit limits of all your credit you possess will impact your home loan borrowing capacity.
#3, Reduce expenses in any way that you can. This could include going down to – one coffee trip – instead of two. Or what about that gym membership that you don’t use? Search for cheaper deals and create a budget to minimiSe your spending.
#4, If you can place more than a 20% deposit towards your property purchase, this will signal to the bank that you are sensible with your money and are not prone to frivolous spending.
#5, If you can find ways to increase your income, do it. Ask for a salary increase or find other income streams like selling baked goodies, offering Professional Services, or becoming a ride-share driver during your free time.