What is my Borrowing Capacity ?

[vmmg1992]

My partner and I want to purchase a property very soon. Depending on the borrowing capacity we will then start saving up for the deposit. Approximate figures below:

My Income:
60k p.a. + SG (Full time)
10k p.a. + SG (Casual)
$375 rental income per week
Loan balance $364,172

Spouse Income:
$36,400 + SG ($1.4K x 26) (Part time)

No other liabilities or children. Can anyone help do an estimate?

 

[Jess Peletier]

Depends on the bank. Are you looking to buy a home or IP? If IP, you can use the rent from the new purchase to help too.

What you can borrow is very much determined by your deposit to - the calculation might say you can borrow $1 million dollars but in reality you can't if you've only got a $30k deposit, and no equity, for example.

If you let me know how much deposit you have ( or can potentially save) I can give you a more meaningful estimate.

 

[vmmg1992]

Depends on the bank. Are you looking to buy a home or IP? If IP, you can use the rent from the new purchase to help too.

What you can borrow is very much determined by your deposit to - the calculation might say you can borrow $1 million dollars but in reality you can't if you've only got a $30k deposit, and no equity, for example.

If you let me know how much deposit you have ( or can potentially save) I can give you a more meaningful estimate.

Initally as home owners then later turn it into an IP. We have hoping to borrow at 95%. We can probably save $30K-$40k. Aiming for a $400k property.

 

[Jess Peletier]

Are you eligible for fhbg?

Based on what you've said, a $400k purchase with a $40k deposit even if not FHB should be fine- assuming credit file is all good.

If you are a FHB, the stamp duty savings and grant will allow for a smaller deposit.

 

[Redom]

Initally as home owners then later turn it into an IP. We have hoping to borrow at 95%. We can probably save $30K-$40k. Aiming for a $400k property.

Quick sense test, 400k in terms of borrowing power is fine.

 

[Jamie M]

Hi there

What can you afford?

Work out how much you're willing to fork out for the mortgage each month (based on a higher rate than current).

What banks are willing to lend and what people can afford can be two different things.

Cheers

Jamie

 

[Rolf Latham]

Hi there

What can you afford?

Work out how much you're willing to fork out for the mortgage each month (based on a higher rate than current).

What banks are willing to lend and what people can afford can be two different things.

Cheers

Jamie

Such gold from a young un

ta
rolf

 

[Rolf Latham]

Jess looks to be in the same state as you

her contact details are there if youd like some specific advice from a local

ta

rolf

 

[vmmg1992]

Thankyou for all the responses. We would like to know the max we could borrow so we know what our price range will be. Saving for a deposit isnt a concern as I have some equity in my IP.

 

[tobe]

Thankyou for all the responses. We would like to know the max we could borrow so we know what our price range will be. Saving for a deposit isnt a concern as I have some equity in my IP.

You need to provide further info if you want a specific amount. For instance, you have 2 jobs, one casual. Most lenders restrict the income they use from a second job, and some also discount casual income depending on how long you have been with that employer.

Again lenders use a diferent calculation on home loans that arent being refinanced. Knowing the repayment amount on your exisitng rental loan is important.

 

[boeman]

What banks are willing to lend and what people can afford can be two different things.

Tthe bank said I could borrow close to $1m for my first home and showed me the repayments.

Sure, I could technically afford the repayments, but would have been broke within 3 months as soon as I got my utilities bills etc.

Instead the property I got is worth 4 years current wage and more than affordable. Still have holidays, clothes and buy my partner in crime nice shiny things.

 

[Jamie M]

Instead the property I got is worth 4 years current wage and more than affordable. Still have holidays, clothes and buy my partner in crime nice shiny things.

Exactly! That's why it can be beneficial bypassing the McMansion and politely declining the banks offer of $1m

Cheers

Jamie

 

[Juliana Ardila]

Instead the property I got is worth 4 years current wage and more than affordable. Still have holidays, clothes and buy my partner in crime nice shiny things.

Agreed, some lenders use the Henderson poverty line as a base for living expenses. This is why it is not ideal to borrow the maximum with such lenders. However, it can be helpful if you receive income that is not allowed in the calculations.