When is the right time to buy? If you’re thinking of buying a property you’ve probably wondered about this. You may be trying to work out if the property market will go up or down. Or you might be waiting for something in your personal circumstances to change.
One important fact you may not know
No one truly knows what the property market is going to do, and you might not be able to borrow as much as you want right now.
But there is still another factor that needs to be considered – one that most people are unaware of.
Lender and mortgage insurer rules are constantly changing.
These rule include the percentage against a property that they are willing to lend (both for owner occupied properties and investment properties). It also includes how lenders calculate how much you can afford. These calculations use a complex series of formulas and buffers.
Lender calculations are more complex than income minus expenses.
Recent trends have seen lenders tightening up. Sure…interest rates are at an all time low. But lender calculations to determine how much you an borrow, are becoming increasingly more challenging. Therefore the amount you can borrow now, may be less than than you could have borrowed a year ago – even if all of your income and expenses remain exactly the same.
Discuss your options with a broker NOW
You may have borrowing options now, that won’t be available in a year’s time. Several current customers they have existing pre-approvals in place, but these approvals won’t be renewed when they expire. As a result, they’re on a tight deadline.
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