How to increase your borrowing capacity.

Banks will look at how many credit cards you own and the amount owing. Even if the balance is zero, the bank will still consider your credit card a liability. So start by reducing your credit card limit to know more than you actually need and cancel any cards you no longer use.

When assessing your application, the lender will look at the likelihood of defaulting on your mortgage repayments. Ensure you pay all your bills on time to maintain a clean credit history. You can check your credit history online before submitting a mortgage application.

You need to show the bank that you can afford to repay the mortgage on top of your current living expenses. Take a look at your expenses over the past three months and see what you can reduce. To assist the process, ask us for a free budgeting tool.

If you have an investment property, ensure the lender takes into account income you receive from rent. Your mortgage broker will help identify which lenders take into consideration rental income and will make sure that income is included in your application.

If you have multiple loans or credit cards, consider consolidating the debts into your home loan. The repayments on a mortgage interest rates are significantly less than other liabilities, so your repayments will be much less each month.

The criteria for assessing an application differs between each bank. Your broker has the ability to run your personal situation through all the lenders on their panel to find out which one is likely to approve your application, saving you time and stress.

Grants and concessions such as reduced stamp duty are available in each state and territory. Your broker will let you know if you qualify and how they can be included in your application.

If you don't have a 20% deposit, you will need to pay Lender's Mortgage Insurance (LMI). The closer your deposit is to 20%, the less LMI you will need to pay. Some professions receive a discount on the LMI premium, ask your broker if you qualify.