Maximise Your Purchasing Power By Properly Leveraging Assets To Win In The Property Market

Too often we find that people are unsure about just how much they can borrow in order to buy the property they’ve seen and fallen in love with.

Instead, many will avoid attachment and write properties off without so much as a second thought, assuming there’s no way they can afford them when this might not be the case.

Over time, we’ve found that what sets successful purchasers apart is not that they’ve got substantially deeper pockets—though that does help—but that they’ve received the right advice from their bank or mortgage broker.

They’re armed with the correct information. They’re prepared. They know exactly where they stand. They have the confidence to place an offer.

To learn more, we sought out senior mortgage broker Nicolle Steinert of Mortgage Choice Mitcham and Happy Valley for her professional insights.

“I highly recommend purchasers obtain a pre-approval prior to offering on any property,” Nicolle says, warning that not obtaining pre-approval is one of the big mistakes many first home buyers make.

“Listening to people that are not experts in lending is also a problem. One person’s borrowing experience is not necessarily everyone’s experience. Our circumstances all differ and our capacity to borrow and requirements in a loan are different.

“First home buyers often want to purchase their dream home as their first home. With age and experience we tend to increase our income, and with the increase in income comes the ability to borrow more and in turn reach new goals. Often a first home is a stepping stone to a dream home and can also become an asset to be leveraged for a further purchase.”

In particular, we’ve found many new or young couples are often surprised by how much they can borrow when they combine their assets.

Nicolle agrees: “Often first home buyers are given the advice from older people in their lives that they need to have a credit history for lenders to approve a loan for them. This is no longer the case.

“The more credit enquiries on an individual’s credit report, the lower the credit score. Credit scores are an integral part of any application for lending. The more credit applications sought, the lower the credit score. The lower the credit score, the harder it is to get finance for a home.

“On the flip side, with interest rates at a historical low, lenders are currently using very low rates to calculate borrowing capacity and this in turn allows for a much higher borrowing capacity, especially for couples leveraging mixed assets.”

Through all of this, with the current market being so competitive, it remains important to stay reasonable and set realistic expectations.

“With lenders taking so long to assess loans at the moment,” Nicolle continues, “a minimum of six weeks for a settlement period is now a more attainable time frame. Lending has changed immensely over the last 18 months to two years. Lenders are now in a position that they are required to obtain much more information from borrowers than in the past and must scrutinise all information provided.”

The message is clear: preparation is key!

Whether you’ve been around the block a few times or you’re brand new to purchasing a property, or even selling a property, the answer is the same: getting in front of a good mortgage broker or real estate agent early will make the world of difference and put you on the path to success.

For more information on mortgages, borrowing capacity and leveraging assets, speak to your bank or broker or reach out to Nicolle Steinert at Mortgage Choice.

For everything else, we’re here to help.

Interested in selling a property with a team that understands the market and how potential buyers can maximise their purchasing power?

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