How Much Can I Borrow for a Home Loan? Why the Answer Could Vary by $200,000

When you're diving into the world of home loans, it's tempting to punch "How much can I borrow for a home loan?" into an online calculator and take the number at face value. But here's the thing, those calculators are like weather forecasts without looking out the window, they give you a rough idea but miss out on the real-life factors that can seriously sway your borrowing power.​

A Tale of Two Approvals: Same Couple, Different Outcomes

Let me share a story from our experience at I Know The Broker that highlights just how much lender policies can differ.​

We worked with a young couple eager to upgrade to a new home while keeping their current property as an investment. One partner, a dedicated nurse, had a novated lease for their car, which meant pre-tax deductions were part of their financial picture. They had a solid combined income, but its structure added some complexity.​

Their first stop was their existing bank, a big-name institution. The bank crunched the numbers and came back with a loan approval that would allow them to purchase a property up to $1.2 million. While substantial, it wasn't quite enough for the home they had their hearts set on.​

Not ready to settle, they approached us for a second opinion. Leveraging our deep understanding of various lenders' policies, we identified another reputable lender whose assessment criteria were more favorable given the couple's specific financial situation. This lender considered factors like the novated lease and rental income differently, resulting in a borrowing capacity that allowed them to confidently bid on a $1.4 million home, at a competitive interest rate, no less.

Why Such a Big Difference? Lender Policies Aren't One-Size-Fits-All

You might wonder how two lenders can assess the same financial details and come to such different conclusions. It boils down to each lender's unique credit policies. Some may exclude certain income types like overtime or bonuses, while others might be more lenient. Liabilities such as novated leases or loans can also be weighted differently. Additionally, lenders apply varying "stress tests" to ensure you can handle repayments if interest rates rise. These differences mean your borrowing capacity isn't a fixed number, it fluctuates based on who you're talking to.​

The Broker Advantage: Your Personal Loan Matchmaker

This is where a seasoned mortgage broker becomes invaluable. At I Know The Broker, we don't just process loans, we take the time to understand your unique financial landscape and match you with lenders whose policies align with your situation. Whether you're a first-time buyer, looking to invest, or navigating complex income structures, we tailor our approach to fit your needs.​

Our team, including Senior Mortgage Broker Renee Hohenhaus and Mortgage Broker Elliott Hohenhaus, is dedicated to guiding you through every step of the process. We offer personalized, friendly, and practical services to ensure you receive the best possible lending solutions. Plus, our services come at no cost to you, we're compensated by the lender upon the successful settlement of your loan. ​

Beyond the Numbers: Comprehensive Support for Your Home-Buying Journey

Our commitment extends beyond securing a loan. We assist with understanding government grants and schemes, navigating the intricacies of loan features, and providing ongoing support even after your loan has settled. Our goal is to make the home-buying process as smooth and stress-free as possible.​

The Bottom Line: Don't Settle for One Opinion

Before you accept a lender's initial offer or rely solely on an online calculator, consider reaching out for a second opinion. The right guidance can significantly enhance your borrowing power and bring your dream home within reach. At I Know The Broker, we're here to help you navigate the complexities of home loans and find a solution tailored to your unique situation.​

Ready to explore your options? Contact us today to see how we can assist you in achieving your homeownership goals.