Browse Forums Home Finance 1 Mar 18, 2013 10:14 pm Hey everyone, long time lurker, first time poster, wondering if people can shed some light. I have made my first home loan application to borrow $400k (less than 80% of property value). I earn $65k before tax, around $47k after tax /HECS. Stable job in professional industry, estimated pay rise of at least 10% a year. I know $400k is a lot on paper, but my partner will be contributing $200 a week to living expenses and I have some income from freelance work I recently started. Both these things can't be taken into account by the bank, obviously. The banker has said I should be fine to borrow $400k and has proceeded with the application. Now I'm getting a bit nervous, hearing that a loan with repayments above 30% of gross income is unlikely to be approved. Does anyone have experience borrowing to almost their maximum borrowing capacity or more than 30% of their gross income? Re: Am I likely to be approved for a home loan? 2Mar 19, 2013 2:49 pm Hi death2thepixies, Lenders nowadays work to their own serviceability calculations, the 30% rule of thumb is more from a personal point of view, and is there because just because a lender may be willing to allow you to borrow a certain amount it doesn't mean that you necessarily should borrow that amount. That can only be determined by yourself, and the impact the loan will have on your comfort of living. There's a few unknowns that need to be taken into account for your proposed amount. Will you be the only one on title? Or is your partner on there as well and their employment income will be used? Also what debts do you have? Is your partner considered a defacto, or are you considered single? Any kids? This all needs to be considered for serviceability purposes. Also the 10% expected payrise won't be taken into account by lenders until it eventuates. Cheers Tom The biggest challenge will be if you take out a loan and then run out of money - you'll have an incomplete security and lenders do not like this so you can get stuck.… 2 19096 If your patio is going to be 35 sqm then that's going to need Council Approval. The fact that they previously approved your 25sqm patio will be irelevant 1 5503 Hi, you've probably already resolved this, however, Commbank will probably pay the funds to you after you send evidence the work is done regardless the change in the quotes. 1 35312 |