Time to consider a loan? The question shouldn't be about how much you can borrow, but how much you can actually afford.

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Investing in new property is a great way to grow your wealth and secure your financial future, both for you and your children. When it does involve you taking out a loan, here are three key things to keep in mind when borrowing. 

1. Think long-term.

Take some time to reason and consider your future. Your borrowing capacity may sound great but if that means you’re eating baked beans every night, it’s probably not worth it.  

A good way of identifying what you can afford is figuring out a budget for some indication. Several institutions have tool and resources to help map out your future spending and allow you to see the impact the new mortgage will have on your life.

2. Be realistic.

Evaluate your needs and come to a realistic figure that you’re comfortable with. Make sure you think about any plans to renovate, have children, cut your work hours or go back to study, because you’ll need to make sure its accounted for in your budget. 

3. For emergencies only. 

Always account for a few rate increases, and make sure your repayments still allow you to save some emergency cash on the side. 

If you think you are putting yourself under too much pressure, reconsider the properties you’re looking at or devise a strategy to save a bigger deposit so you can borrow less.      

At the end of the day, it’s about knowing what actually works for you and what you actually need from a loan. We advise speaking to a financial consultant to find out more about the best types of loans for your needs. 

If you'd like help to find the perfect property, feel free to contact us now to speak to one of our Project Sales Managers today.