How much should I borrow?
You need to know exactly how much you spend each month to be able to work out how much you can afford to borrow. The first step is to draw up a monthly personal budget.
Section 6 of the Fundit application form helps you to identify your big budget items. This will give an indication of how much is available to put towards loan repayments. Carefully consider what sort of lifestyle sacrifices you are willing to make. Some people are prepared to give up dinners out and overseas holidays while others may find this difficult. Taking out a home loan shouldn't mean your lifestyle is unpleasant, but you may have to give up some of the extras to enable you to service your loan.
Once you've done your budget use Fundit's helpful calculators to work out your lending comfort zone.
How much will a lender lend you?
When deciding how much they will lend you, lenders will look at your ability to service the loan and whether you can afford the repayments over the loan's term. They'll also take into account possible interest rate rises.
Some lenders may work this out using your uncommitted income - what is left after all your household expenses are paid. This helps them to determine your ability to repay the loan.
They will also assess your credit risk by determining whether you're likely to default on your loan repayments. Lenders will take into account things like your occupation, employment history and where you live.
