Fixed Rates: When FOMO Comes Back To Bite You

Fixed Rates: When FOMO Comes Back To Bite You

A part of a finance broker’s responsibility is to work out how much you can potentially borrow and to align your needs with a suitable loan product. While it’s true that you can jump online and get a rough estimate of your borrowing capacity from plenty of websites, they are often inaccurate.

Borrowing calculators are handy for getting a generalised guide together, but shouldn’t be used for any accurate calculations or major decisions. Often calculators will not factor in things like credit card limits (not balances), all liabilities, overtime bonuses and allowances, or your taxable income. Different banks will allow you to borrow different amounts based on these aforementioned guidelines and it is highly advised that the fine print is examined in exceptional detail, as this is where the devil may lie (so to speak).

A proper estimation of living expenses must be carried out, as well as associated loan fees, such as legal fees, lenders mortgage insurance, loan-application fees and stamp duty. Having an active credit file or issues relating to defaults or arrears will mean that most mainstream lenders will steer clear of you. This is not to say that you’re unable to secure a loan, but be aware of how these factors will impact your ability to procure loan products.

Calculating loan capacity is not as straightforward as it may seem, so enlisting the help of an expert can make all the difference in ensuring you get a product that is right for you. Contact Pivotal Finance’s Graeme Christianson to find out more.