Do Savings Affect Your Borrowing Power?
Potential applicants researching the various requirements for applying for a loan may want to know if various financial aspects affect their borrowing power. An applicant’s assets do affect their borrowing power, including the following examples:
- Savings accounts
- Share portfolios
Assets have the potential of increasing applicants’ borrowing power if they are in good standing. Additionally, an applicant with a sizeable savings account has the ability to place a larger loan deposit, which can also increase their borrowing power.
Borrowing power is affected by a wide variety of elements, including the following examples:
- The applicant’s assets
- The applicant’s income, amount of debt, and financial requirements
- The applicant’s financial history and credit score
- The loan’s interest rate, amount being borrowed, and terms
- The applicant’s family size and financial capabilities
When an individual applies for a loan, the mortgage broker or lending specialist will check their credit score and financial history to determine the applicant’s borrowing power and risk status. A high credit score and good financial history can indicate a low-risk borrower, while a low credit score and bad financial history indicate a high-risk borrower.
An individual can increase their borrowing power by making consistent debt repayments, lowering credit card limits, increasing credit scores, and cancelling unnecessary credit cards.
If you are interested in learning more about borrowing power or are ready to apply for a loan, reach out to the professional lending specialists at Mortgage House for specialised information and loan application assistance.