There have been substantial changes recently in relation to how lenders assess your ability to service a prospective loan with regard to living expenses. Gone are the days when a loan was assessed primarily on income, taking your word for it in relation to living expenses and using the Household Expenditure Measure (HEM). Nowadays, banks will take a close look at your discretionary spending. That’s right! Do you eat out more than in? Do your online subscriptions add up to more than you realised? Lenders will analyse your bank statements for up to 3 months.
To be the recipient of a “Good news – you’re approved!” phone call for your home loan, it is important that you live NOW as if you have the loan already and review your living expenses thoroughly.
One of the best ways to truly understand where you are at financially and what your ongoing costs are is to have a comprehensive budget and stick to it! Launch Finance has developed a budgeting tool to assist you with this. The budget planner calculator below is a great start.
To receive a copy our comprehensive budget planner, simply send an email with the subject heading ‘budget planner’ to [email protected] and we will send it you. If you’d like to review your finances with one of our brokers, you can book in here.
Disclaimer: The information provided by this calculator is indicative only and does not constitute professional advice. The calculator provides you with an indication of your spending patterns and entirely reliant on the accuracy of the information you have entered. This is a handy first step before speaking with your mortgage broker. The calculations should not be relied upon for the purposes of entering into any financial commitment.