If you were considering applying for a mortgage, would you think of yourself as a bit of a penny pincher? Or are you more into an extravagant lifestyle of wining and dining?
When it comes to determining your home loan size, it’s important to consider the lifestyle you live now and the sort of lifestyle you could reasonably adjust to.
For some, it’s easy to live on baked beans and toast, but if you’re used to a more upmarket lifestyle it might be tougher to tighten the purse strings and stick to a budget when it comes to paying for that home loan.
Of course, taking on a home loan requires a fair bit of financial awareness, and you will need to be much more aware of your spending habits.
Assess you Mortgage Borrowing Capacity
A great way to assess your true home loan borrowing capacity is to try your mortgage loan on for size before you commit, work out how much income you would have left over if you were to take out a certain size home loan and then start living by it.
If you can comfortably manage, that’s great, but if you can’t, you might need to reassess how much you can reasonably borrow for a home loan.
Of course, a mortgage broker is best placed to help you determine your borrowing capacity and exactly what size debt suits your financial needs.