How much can I borrow?
How much can I borrow?
This is the most asked question when people contact me, and the answer is really simple…
To purchase a home in my view is simple the equation looks like this…
1. What’s my deposit?
2. How much can I borrow?
3. Is it affordable?
When people contact me, they already know what their deposit is which can be a combination of, Kiwisaver, Savings, First Home Grant and perhaps a Gift, this all adds up to your deposit.
How much can I borrow comes down to affordability, all banks work on what is called a UMI, which means “Uncommitted Monthly Income “ In summary your money comes into your bank accounts each month, then you pay your bills and other commitments you may have and then what’s left is called “Uncommitted Monthly Income“ Depending on what that figure is depends what money you can borrow.
Banks willingness to lend money does vary, for example if I submit a Pre-Approval application to borrow $300K and get an approval that’s great news, if I submit that same application to a different bank sometimes it can be declined, this is called “Appetite “ and “ Bank Policy ”sometimes the banks are hungry for business and sometimes they aren’t.
Experience
The secret of an experienced mortgage broker is to know when to submit the Pre-Approval for finance at the right time and to which bank as not all banks will approval all Pre-Approvals.
Pre-Approval
If you want to find out how much you can borrow just ask we setup a meeting with you which would normally take about an hour, I gather some information and you should be Pre-Approved within a week with a written letter from a bank, then you add your deposit to your Pre-Approval amount and that sets your maximum purchase price, one last thing It’s a free service.