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Figuring out your borrowing capacity

By Louise Morrin

Before you begin looking into the local real estate market for property in Carlton, something you should take the time to figure out is your borrowing capacity. This can help you set your search parameters and find a home that fits your budget. 

Borrowing capacity is the amount of money a mortgage lender is willing to provide to an individual for their property needs. Understandably, knowing this figure and having an idea of your price range means you can narrow down the type of property you're looking for, as well as the area and features it might have. 

A lender will figure out your borrowing capacity based on a number of different financial factors, including aspects like your income, expenses, credit, your partner's economic situation, the type of loan you're interested in and the anticipated interest rates involved. 

Furthermore, it's possible to estimate your own borrowing capacity using an online calculator provided by most lenders. Simply enter the details required and get an instant projection of your borrowing capacity, as well as a timeline of repayments for easier forward planning and budgeting. 

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