How can I get a home loan?

When applying for a home loan, one of the most pressing questions you’ll have is ‘how much can I borrow’? Once you have applied for a home loan, the banks and lenders will assess your circumstances against a number of criteria to determine the answer to this question.

While each bank or lender may be different, many will consider similar factors and information that will be used in determining the final figure that you can borrow. Here we take a look at some of these deciding factors, how you can prepare for them, and also what could influence banks or lenders.

 

Size of your deposit

It’s a given that having a good amount of money behind you is vital if you wish to borrow a large amount. Put simply, the bigger the deposit, the more you stand to receive.

If you are prepared to make a reasonably sized deposit, it is well implied that you have a healthy income coming in. Bear in mind that even if you do have an especially high income and a good credit score, you may be limited if you do not have a reasonable deposit in place.

Employment Status and Income

Your employment status can also play a crucial role in determining how much you may be able to borrow. From a bank’s perspective, an individual who is self-employed, for example, may be perceived to carry more risk as sick days and time off must be accounted for.  Shift workers are also assessed differently by banks and lenders as overtime can be a factor in determining the income of an individual.

Whilst it isn’t necessarily about how much you earn, your employment status may determine how much you can borrow, meaning a steady income is often more favourable.

 

Type of Loan

The amount you can borrow will also depend on the interest rate and term of your home loan. Put simply, the lower the interest rate, the lower your repayments will be. If you have a longer-term loan, this will mean lower repayments. However, a shorter-term loan may see you saving on interest.

 

money-pot

 

Your Living Expenses

The banks or lenders will also factor in your living expenses and the costs that go into maintaining your lifestyle. The reason they will look into this, is to find out whether you can still maintain it after making your repayments.

If you have applied for a hefty home loan amount, you may need to make slight adjustments to your lifestyle in order to meet your financial commitment.

 

Meeting these Factors

If you can prove that you are truly reliable, someone who can meet financial obligations within a time frame, you will be well on your way to borrowing a high amount. The biggest downfall you could likely face is if late payments are mentioned in your credit history. This will very likely work strongly against your case.

If you believe you’re worthy of a substantial home loan, but want more information regarding the banks or lenders’ decision-making process, then be sure to contact our industry experts on 1800 184 284. You can also book a call online.

Having trouble understanding how to finance? Download our FREE guide today to get a comprehensive overview of what you should expect and prepare for.

 

Emily Felton

Following a degree in Marketing, Emily cut her teeth in the world of journalism, writing features for various national publications. Her particular areas of interest are sustainable housing, renovation and good old interior design.

About

iBuildNew is the market leading aggregator dedicated to residential home construction and land development. As an independent platform, iBuildNew helps Australians identify and compare new home designs, house and land packages and land estates. It’s the smart way home buyers, who are considering a new build, can find the ideal options to match their individual needs. Home building is a big decision, we make sure you get it right.

You may also like

Jul 24, 2019

Learning The Language For First Time Buyers

When purchasing property, especially for the first-time buyers, it is easy to be overwh...
Read More
Jul 24, 2019

Smart Wealth Building with Home Equity 

While homeownership may seem to come hand-in-hand with a mountain of debt, establishing...
Read More
Jul 23, 2019

10 Essential Questions To Ask Your Mortgage Broker

When you're in the market for a new mortgage, acquiring a home loan can be a complicate...
Read More
Jul 31, 2019

5 Tips on Downsizing Without Sacrificing Style 

Whether it be as you approach retirement or as you seek a simpler, less expensive way o...
Read More
Aug 01, 2019

Breaking Down Your Questions About Construction Loans

When building a house, you will definitely come across and be offered construction loan...
Read More
Jun 26, 2019

First Home Buyers: Here’s How Long It Takes To...

Saving can be challenging at the best of times, but saving for a first home deposit can...
Read More
Aug 01, 2019

Cost Saving Tips When Building A New Home

When starting your exciting journey to building a new home, constantly adhering to your...
Read More
Jul 09, 2019

5 Hidden Costs That Shock First-Time Homebuyers 

It’s no secret that buying a home is a huge financial investment. In fact, it’s usually...
Read More
Jun 24, 2019

Different Types Of Home Loans And Choosing The Right...

Securing a home loan isn’t really the daunting task it’s made out to be. While a strong...
Read More
Jul 10, 2019

Tips To Prevent Homebuyer’s Remorse

The journey to buying a house is an exciting, emotional experience that will surely lea...
Read More

Get more from

Browse Investment Properties