Boost Your Borrowing Capacity With These 4 Simple Tips


Your borrowing capacity affects how much you can spend on a property. It is an important aspect when you are looking to buy a home or an investment property. Although, your borrowing capacity can vary from lender to lender, here are things you can do to improve your borrower capacity from any lender.


Tip #1: Reduce Yor Debts

If you have any liabilities, excluding a home loan, personal loans, car loans HECS TAx, things like that then those repayments are going to impact your borrowing capacity with the lenders. So, the more you can pay off those loans or if you can get rid of them and eliminate them you’re going to see an instant boost to the amount of money that you can borrow from the banks.



Tip #2: Reduce Your Credit Card Limits

Or even better close your credit cards altogether. People think that because they have a ten-thousand-dollar credit limit but they owe nothing on it that it doesn’t affect them but it does. When a bank assesses your ability to borrow money, they assess it on the limit of the credit card, not the amount owing. So, if you got credit card limits that you don’t use and don\t need, reduce them or eliminate them completely. You’re going to see an instant boost to your borrowing capacity.


Tip #3: Increase Your Income

That might sound a little bit arrogant but everyone has the ability to increase their income. If you’re working for someone, look to get a promotion, earn commissions or bonuses, or even do a little bit of overtime. If you’re self-employed, look to get the business cranking. Earn more profits, pay yourself a bigger salary. All these things are going to add up and the biggest way that you can increase your borrowing capacity with the banks is to increase your income.


Tip #4: Choose the right finance product

Choose the right finance product for you. There are over 60 lenders in Australia and they all asses income differently. So, it’s important that you work with a strategic Finance Broker to maximize or increase your borrowing capacity. Some banks are very lenient and very generous with their borrowing capacities. Some banks are really strict and very conservative with their borrowing capacity. So it pays to understand the entire lending landscape and picking the lender that’s the right fit for you.



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