The Affordability Questions You Need to Consider

The Affordability Questions You Need to Consider

Establishing your budget and what you can afford is an important initial step in the new home process.

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Living with family, or putting up with annoying housemates? Sounds like you might be ready to become a first home buyer! Or maybe you’ve grown out of your current address, and need some more space for your growing family? Either way, establishing your budget and what you can afford is an important initial step in the new home process.

Know your habits

To really get an accurate picture of your outgoings, spend a month recording every dollar that you spend, including the recurring payments like loans and credit cards. You will be surprised how quickly the discretionary spending (lifestyle spending like takeaway coffee and non-essential purchases) adds up. You may also then understand why the bank balance seems to disappear with nothing really to show for it. Your bank or lending agent will need to see 3-6 months of bank statements, which means starting as early as you can on tightening some of those habits.

Check your debt
If you’re thinking of taking the step to become a homeowner, or upgrading to a new home, it’s a good idea to have a look at your current fixed outgoings, that means what debt repayments are you making each month. Maybe there’s an opportunity to reduce the amount of credit cards, and the spending limits on the ones you keep? Not only does this assist with your lending opportunities it also impacts what you will be able to afford to buy.

Get the right advice

Buyer beware of online loan calculators! While they are a great tool to play around with scenarios, they rarely have the capacity to take into consideration the unique situation of every borrower. These calculators are based on general formulas to equate different lifestyles into borrowing capacities, such as general costs associated with dependents. They also don’t represent pre-approval. The best solution is to speak to a loan specialist, either at your current bank or via a broker, for a no-obligation appraisal of your individual situation. This discussion can include what you can afford now, as well as some steps to take in the case where you need to increase your borrowing amount.

Kick start a plan

Getting ready to build a new home takes a plan, and the sooner you set some goals and make some preparations the quicker you can kick start the home ownership journey. With the real knowledge of your spending habits and the right advice from a lending specialist you will be on your way in no time.

To get the inside scoop on the latest house and land packages, home designs, land specials or to arrange an appointment with Deanside Village’s Mortgage Specialist, visit the Land Sales Team at 624-648 Neale Road Deanside or call 0447 295 210.