How having children can affect your borrowing capacity

When it comes to getting a home loan or borrowing money from the bank, they look at your overall situation; how much money you have in the bank, how much do you earn and any debts you might have, but did you know that they also look at how many children you have?

Yes, the banks do indeed look at how many dependent children you have. Whether you have a cute chubby little baby or a teenager that eats you out of house and home, the banks take your bundle of joy and add them into the literal equation. As your brood grows, your borrowing capacity unfortunately falls.

When it comes to getting a home loan, the bank will look at your income, or your combined income for a couple; and then minus your standard living costs and debts to assess your ability to repay your home loan. Banks now see each child as an additional cost that will be added to your living costs.

Your borrowing capacity will vary from Lender to Lender, knowing what you can afford is very important and a great place to start.

What does this mean for you?

If you are planning on buying a house and want to start a family, it could be a good idea to get your property finances in place first, so you can maximise your buying potential. Whilst you do want to maximise your buying potential you might also want to consider how you will maintain the repayments when it comes to maternity leave and any day care fees you might incur not too far into the future.

If you are looking for a home loan or investment property, why not talk to a financial advisor that has your interests at heart and not the banks. Gold Seal Finance have a team of experience and trusted financial advisors that in and around Brisbane and Logan that can take the hassle out of finding the most suitable loan.

Call 07 3423 3877 and start financially planning for your future.

General advice warning

This information and the links provided are for general information only and should not be taken as constituting legal, financial or professional advice. You should consider seeking legal, financial, or other advice to check how this information relates to your unique circumstances.