What’s your borrowing capacity like? Are you taking the investment world by storm? Or are you caught in that vicious circle we like to call a rut?
If you’re like many, you’re only just managing to (painstakingly) pay your mortgage each month. How could you possibly borrow even more money?
But imagine having the capacity to apply for bigger loans, so you always have the cash when you need it most.
The good news is – there’re a few quick and easy ways to boost your financial capability. Here’s what you need to know.
1. Sleuth out those loans like Sherlock
This is where you hire a mortgage broker to go investigating.
The thing is, if you’ve wracked up a lot of credit in your time (credit cards, interest-free finance, pay later programs like Afterpay etc) – it’s going to show on your record. But there’s a good chance you have no idea exactly what’s even on that record.
A mortgage broker will shop around to find a lender most suited to your needs and circumstance.
2. Not all buffers are created equal
A buffer is an extra amount whacked onto your loan to protect the lender in case you can’t pay it back.
But many sneaky lenders place this buffer onto ALL your outstanding debt. That’s anything from personal loans to store purchases to credit cards. It hardly seems fair, does it?
So firstly – check your existing debt to see what buffers already apply. See if you can shuffle things around to decrease these figures as much as possible. Then, go find a lender who will only add a buffer to the loan you’re taking out with them (they do exist!).
3. Ditch your outstanding credit
Do you really need that third credit card? Perhaps what you should be doing is not be living beyond your means. Because each card is essentially a loan – incurring ridiculous amounts of interest.
But many people don’t even realise their credit cards are debt. They have no idea that it could be affecting their financing.
So, cut back on the number of cards asap – and pay them off!
For every $1000 you knock off, you increase your borrowing capacity by thousands.
4. Rein in those expenses
Ever heard the term “frugal”? It sounds boring, I know. But the short of it is – the more you spend, the less you’ll be able to borrow.
Where once you could tell little porkies on your loan application, lenders are now clamping down on your discretionary expenses (i.e. all that extra unnecessary stuff). The more of these expenses you have, the less dosh you can hope to secure.
Even billionaires live the frugal lifestyle. They know they have to make some sacrifices to make the big money.
So, think about eating cheap, keeping your car (stop upgrading!), and getting onboard the upcycling / recycling train. It might hurt in the short term, but not if you’re playing the long game.
The trick is to show up as the best loan candidate version of you that you can.
And while you’re giving your finances the big make-over, why not consider what you can do with all that extra cash. If you’re thinking you’d like to make lots of money as soon as possible; talk to us about our property syndication opportunities. You might actually turn those dimes into good times.