When a lender looks at how much money you might be able a borrow, they are comparing how much you earn to how much you spend. The difference between your income and expenses is the amount of money you have left over to put towards your mortgage repayments. By cutting back on unnecessary spending you might be able to increase your serviceability.

It’s not always easy for employees to bring up the conversation of a pay, but if you really need to find a way to increase your income it could help. Even a modest increase might be enough to tip the scales in your favour and help you qualify for a home loan for the property you want to purchase.

When a lender looks at your ability to make repayments, they will take into consideration how much your interest costs are going to be. The lower the interest payments, the more you will theoretically be able to borrow. By working with a mortgage broker who can compare interest rates across lenders, you might be able to improve your borrowing capacity.

If you have credit cards, they will likely be reducing the amount of borrowing power you’re able to access. Banks look at your credit cards as if they are maxed out, because you theoretically have access to those funds. By cancelling unused cards or even reducing your credit limit, you might be able to improve your chances of getting into a new home.

If you’ve got a number of high interest debts that are adding to your weekly expenses, it could be worth paying them off before applying for a loan. Any weekly costs that you need to pay will substantially reduce your borrowing capacity. They could also be weighing on your credit rating as well if you haven’t been keeping up with them.