What is borrowing


Your borrowing power is simply how much you may be able to borrow in order to purchase or build your home. Lenders determine this amount based on your financial situation and other information you provide them. If our home loan calculator verifies that you are in a surplus, the chance that your loan will be approved rises. However, your lender will likely look at other aspects of your finances, including savings and current employment.

Your borrowing power can be also affected by how much you earn, existing debts, and the size of your deposit. 

How to increase your Borrowing Capacity

If you’re wondering how to increase borrowing capacity, there are a number of things you can consider. The first is to know your credit score, as a high score indicates to lenders that you are a responsible owner and will not default on your mortgage. You can check your credit score online for free through sites such as Equifax.
Another way to increase your borrowing capacity is by reducing any existing debt. This may mean having to pay off credit cards or unsecured personal loans. It’s best to try and pay off high-interest loans first since these have the biggest impact on your borrowing power. Additionally, you will want all of your finances up to dates, such as tax returns and proof of income.

You may also be asking “does borrowing power include my deposit?” Having a large deposit can significantly improve your borrowing power, so it’s best to try to save as much as you can before you commit to a home loan. Similarly, increasing your income – whether it be through saving tax returns or taking some extra shifts at work – can boost your borrowing capacity.

Lastly, you can consider splitting liabilities if you are applying for a home loan with your partner. This can increase your home loan borrowing capacity, especially if you can prove that your partner can and will support any dependents financially.

Once you have a better idea of your home loan borrowing capacity, you can begin to plan for the future. A future with Brighton Homes means a gorgeous home that you will adore for years to come, with a range of architecturally designed homes that perfectly fit the way you choose to live your life.

MyChoice Home Loans

At Brighton Homes, we are proud to work alongside our in-house finance experts at MyChoice Home Loans. In order to help you better understand your borrowing power and the different home loan options available to you, the financial experts at MyChoice are available to discuss your situation with you and provide you with the right advice to start your home building process with confidence.