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You’ve studied hard for many years and, to get there, you borrowed on your Student Loan for courses, books, and some money to live on. Now you have a deposit for a house … and a Student Loan of four times that! How is your Student Loan going to affect your chances of getting a mortgage?
When reviewing a home loan application, banks consider a variety of factors to calculate affordability. However, all factors considered, it can be summarized into this simplified equation:
So, let’s look at these 4 components in more detail to understand what you can do to put your best foot forward when applying for a home loan, and identify any hurdles you may need to overcome.
Whether you’re a first home buyer or already a property owner, we’ve all been nervously watching interest rates continue to rise through 2023. And now with last week’s OCR rise of another 50 basis points … if only we had a crystal ball to know the impact this is going to have on home loan interest rates going forward, and whether it’s a good time for first-home buyers to dive into the property market.
This article was written April 2023.
You‘ve done the hard yards, you’ve scrimped and saved, and you cautiously think you’re ready to move to the next stage of buying your first home! High Fives by the way, you have just achieved the most difficult milestone of the journey, and you’ve stayed the distance. We know how hard you’ve worked and now the fun part begins! But where to from here?
Borrowing at the moment isn’t easy and a lot of this comes down to bank credit policy in this market and their appetite to lend. Credit policy varies across banks, however, in most respects, they remain very similar. This article helps to explain the importance of debt servicing when applying for your first home loan.