Ways to improve borrowing capacity

1. Credit card

Remember to take into consideration about your credit card. If you have any unused credit card just cancel it off or perhaps reduce the card limit. This is because banks are taking into consideration of the credit card when determine how much actually lenders can borrow. As so credit cards will have an effect on the amount of load you can actually borrow. Once you have reduced the limit or remove unused cards, it will improve your borrowing capacity.


2. Keep financial records up to date

It is essential to update your financial information by time to time in order to maximize your borrowing levels. Banks have begin to tightening their lending criteria and therefore if you are able to prove additional income that you could get rather only your base salary it could be an advantages to you. For example salesperson could get bonus payments in addition to their monthly salary. Thus it could be disadvantaged if you only show your monthly salary to your lender. It will limit the amount that you could actually borrow.


3. Reduce your Bad debt

Avoid lease/hire purchases which are considered a liability and decrease your disposable income unless you are self employed. If you have a company vehicle or allowance provide evidence of this. Lenders will take this cost off your living expenses. Never forget and try to pay off your personal loans because lenders will look into this matters. History on debts your are owning to credit card company, not able to settle car monthly installment, and so on will hinder you from getting a loan initially as well.


4. Pool the family's incomes.

Increase your chances of getting a loan approval by pooling the family's income together such as father's, mother's, and children's incomes. For instance, you want a home loan worth $1,000,000. But based on your income, you are eligible only for the amount of $500,000. Assume that your spouse is also working and have income as well; therefore you can pool your income along with your spouse's income to get the approval for the home loan.