Jul 19, 2014 11:24 pm
We are looking at selling our current home and buying in a new area, closer to family and work.
We are looking at approx. 70-100k higher mortgage than what we have now. Our current mortgage is guaranteed (a portion of it), and my parents are willing to guarantee our next mortgage as well. They will guarantee 20℅ which will act as our deposit and so we can avoid LMI. Using repayment calculators we can easily service the higher mortgage, and I know the 'how much can you borrow' calculators are quite generous, but they tell us we can borrow 200k+ over what we are looking at.
I am a little concerned because last time we got our mortgage we had zero debt. This time we have 8.5k credit card debt, and 5k personal loan (all with the same bank as our mortgage). We do have some savings that would remove the credit card debt, and some of the personal loan, however we were hoping to use this towards improvements on our current house to obtain the highest price possible. I know paying down debt is always smarter, however in this instance I was thinking it would be more beneficial to give us a chance to get as much out of the sale as we can.
Does anyone have any words of wisdom that could calm my nerves?
Re: Nervous about approval2
Jul 19, 2014 11:33 pm
I found the mortgage choice calculation to be the most accurate for borrowing capacity, pretty much down to the dollar.
I'd say if you can get approval for the amount you need with the cc debt and loan then Reno to attract buyers! If you can't then think of inexpensive ways to spruce up the place and pay out your debts.
Re: Nervous about approval3
Jul 20, 2014 6:23 pm
The banker or broker should be able to tell you upfront prior to you submitting the application whether the application services (i.e. you can borrow the desired funds) or not.
Hasn't this been done?
Re: Nervous about approval7
Jul 24, 2014 8:37 pm
Just updating - our broker said she ran the numbers and it looks like it will be okay with our debt.
Still nervous, but I guess she is the expert so would know! We will apply for the pre approval, in a couple of months - just before we put the house on the market.
Re: Nervous about approval8
Aug 06, 2014 9:31 pm
Do up your own budget and also adopt standard living costs at about 30k for a couple and 16k per child.
For the loan repayments use a principal and interest calculator and add 2% to the interest rate quoted.
Calculate any existing bank loans on principal and interest with the 2% sensitisation.
If your income is a combination of commissions/overtime and things of that nature the bank may rely on less of your income.
From your income subtract the standard living costs and loan repayments/credit cards.
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