Presenting a Good Case
As we’ve already mentioned, there are 2 key parts involved with getting your home loan:
- You deposit
- Your income, more specifically your income after expenses – this is called “servicing”
We’re now going to spend time unpacking how to best present your case to the banks to help get you into your home.
Let’s start with servicing more broadly.
Often, it is about what the bank will lend to you and getting yourself sorted so they will lend you money. However, more important is what are you comfortable with? What do the repayments look like and how do these fit into the context of your life.
This is where knowing your numbers is vital, so that you know what you can afford without making you life uncomfortable. Using a basic calculator like the one on the sorted website can help you see what your repayments would look like.
I suggest running the numbers based on today’s interest rates, but then also if rates were 1-2% higher – what does this do to your life?
Don’t forget to also factor in the following:
- Home insurance
- Rates
- Some money for repairs and maintenance
- Funds for life and mortgage protection insurance
My tip, do this before going through the process of starting to shop. Get a really good idea of what you are comfortable spending.
Why?
It is very hard once you start looking at having to lower your budget by $50,000-$100,000. Typically, it will mean sacrificing something – area or quality.