From first home buyers to families looking to upgrade their home, or buying an investment property, a pre-approval is an important step in planning for your purchase.
The importance of a pre-approved home loan
A pre-approval is a confirmation from a lender, that they have agreed in principle to lend up to a specified amount of money towards your purchase.
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When applying for a home loan, part of the assessment process includes what is generally called a “serviceability assessment”. In other words, it’s a way of testing how much you can afford based on your income and minus expenses.
Part of the expense category will include debts (also known as liabilities). Not all debts are equal and when it comes to buying a house, some debts can be helpful and some not so much!
Most lender serviceability assessments require a positive net income position (also known as surplus income) and many lenders also have DTI (debt to income) benchmarks which need to be met.
Below is a summary of some common types of debt you will need to declare to your Mortgage Broker and how they might affect your home loan borrowing capacity.
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Whether you are a first home buyer, looking to refinance your existing loan, looking to purchase an investment property or wanting to invest in commercial property, (unless you’re in an incredibly fortunate position) you’re going to need finance to help you achieve your goal. You could go directly to a bank to help you or you could use a mortgage broker.
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As mentioned in our previous blog, owning property is one of the most effective ways of building wealth. The real value of your home lies in the equity raised and when you have raised enough equity, you have the option to access it. Here are our top ways to make the most of the equity in your home.
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There are more perks to homeownership than just being your own landlord – home equity is one of them.
Owning property is widely considered to be one of the most effective ways of building wealth. Yes, the property is the asset, but the real value of your home lies in the equity raised. Equity is essentially the part of the home that you own, which increases as you pay off your home loan.
When you have raised enough equity, you have the option to access it. From renovating your property, to buying an investment to buying into the stock market – the world is your oyster, and your home equity is the pearl.
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