When assessing your loan eligibility, lenders focus on three things; income, expenses, and existing debts. While income and debts can be harder to shift, your everyday spending is something you can take control of – especially in the crucial 3 months before applying for finance.
Tip 1: Trim Your Spending Before You Apply
A few small adjustments can make a big difference to your borrowing capacity. In the 3 months before you loan application:
- Set a clear budget
- Cut back on unnecessary costs
- Track you spending to keep yourself accountable
These changes can help increase your borrowing limit and put you in a stronger position to secure the property you want.
Tip 2: Review Your Insurance (Home Car Health)
Insurance premiums tend to creep up year after year – often without you noticing.
Ways to save:
- Compare providers annually
- Raise your excess to reduce premiums
- Remove add-ons you don’t need
- Check for loyalty or multi-policy discounts
A quick review could result in significant annual savings.
Tip 3: Streamline Subscriptions & Memberships
Gyms, apps streaming platforms, digital services – it all adds up!
Ways to save:
- Can unused or duplicate subscriptions
- Share family plans where possible
- Rotate streaming services month-to-month
A cleaner monthly statement also looks better to lenders
Case Study: Maximising Borrowing Capacity
A recent referral from a REMAX Agent led us to a buyer whose bank had told them they couldn’t borrow enough to purchase the home they loved. After reviewing their situation, we found:
- A personal loan
- Several store cards
- Multiple underused subscriptions
These were all negatively affecting their borrowing capacity.
We arranged valuations on their existing property and using their available equity, we were able to:
- Consolidate all debts
- Release funds for their deposit
- Reduce their interest rate
- Significantly increase their borrowing power
With renewed confidence they submitted a competitive -and ultimately successful officer on their dream home. They’ve now moved in, rented their previous property and simplified their commitments for easier ongoing management.
Helping customers save money and achieve their property goals is what we do every day!