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- In Bee Savvy - Getting the most out of your loan, First things first - Steps before applying for finance, Home sweet home - first home owner finance, Uncategorized
If you are looking at buying a home or investment property, or refinancing a current property loan, you would be aware that your income and expenses is one of the most crucial factors regarding how much you can be approved for.
However there are other factors involved that lenders will look at, such as your everyday living expenses. You may be surprised to know, that lenders will use the higher of either your stated expenses, or an amount determined by HEM (The Household Expenditure Measure).
What is HEM?
The Household Expenditure Measure is a guide based on information collected by the Australian Bureau of Statistics, which tells us how much the average person spends each month on things such as food, bills and holidays.
Whilst you may be quite frugal with your spending, lenders will still place a minimum amount of spending, when calculating how much you can borrow.
This varies depending on where you live, how much you earn, whether you are married or single, and how many children you have.
What Can I Do About Hem?
There isn’t a lot that you can do to change the minimum Hem that will be placed in calculations for your loan, though this amount can vary from lender to lender.
What you can do though, is ensure that you are spending wisely and conservatively, so that your ongoing monthly expenses do not exceed the HEM amount, otherwise your expenses based on your bank statements will be listed as even higher than HEM, which will reduce how much you can borrow for your property loan.
What’s The Best Approach In Applying For My home Loan?
At Bee Finance Savvy, our in house brokers, helps home buyers at all stages of the process. We will help to review your spending habits, and
match you with a lender whom will best suit your property loan requirements. If we believe you need to make some changes before we apply for your loan, such as cutting back on your spending habits, we will let you know. As lenders no longer accept that these changes will be made once you get your property loan, they need to see these improvements before you apply. We can also advise you of your anticipated borrowing capacity, and what actions you can take now, to increase the chances of your application being approved.
If you’d like to hear from just some of our satisfied customers, take a look at our reviews on WOMO https://www.wordofmouth.com.au/reviews/bee-finance-savvy-miranda