Increase your borrowing power

Bank lending criterias have tightened since the Global Financial Crisis, but there are several tweaks you can work on to increase your borrowing capacity. Getting the right loan product is key for you to make investing in property a breeze. Here are some of the things you can do to boost your loan and break through the credit ceiling:

Debt Consolidation

Consolidating debt allows you to manage personal loans with short repayment terms so that you don’t get burdened with expensive monthly repayments. One option is to consolidate your personal loans into your mortgage to stretch the loan term. However, this strategy can attract more interest in the long run. Another option is to create an offset account which allows you to have personal loans deducted to the account. Debt consolidation should be done to make your loans manageable.

Reduce Credit Card debt

Most lenders look into credit card debt to determine the financial health of the borrower. Check for unused cards, or tho se that have limits beyond your credit needs. Decreasing credit card limits can also have a significant impact – for instance, reducing a $12,000 debt to $10,000 can increase your net pay by as much as $3,600 per annum.

Keep financial records

One of the reasons people have a hard time securing the right loan is because they don’t have up to date information about their finances. Keeping and submitting your financial documents on time will allow you to have up to date information, giving lenders a clear picture of what your true income is.

Interest Rates

Take advantage of low interest rates. An interest rate drop of 1% on your current home loan can free up as much as $260 a month. It is favourable to invest with the current interest rates.

Shared liabilities

If a property is purchased in your name, you can split your expenses with your partner. For couples that are both working, this helps alleviate the financial burden in the household.

Loan Terms

Whatever is convenient for you and your current financial standing, ensure that you get the best loan term. This allows you to pay off the loan faster, or make repayments affordable. Consult a financial planner as to what repayment term is best for you.


Apart from managing your finances to pay off your loan and household expenses, it is best to always set aside for savings. It is also advisable to build up as much deposit as you can before securing a loan. A three to six month consecutive deposit is often favoured by lenders.

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