In recent weeks, we have seen a noticeable uptick in the number of clients who inadvertently make a costly mistake that can impact their borrowing capability – often to the tune of $150,000.

Many individuals don’t realise that having existing car loans can significantly reduce their ability to secure additional financing. One of our clients recently faced this issue firsthand, learning a tough lesson just as he was preparing to apply for a home loan.

In his case, he failed to inform me about his intention to finance a new car, which was valued at $60,000. If I had been aware of this crucial detail, we could have explored alternative financing options or discussed the necessity and timing of this purchase more thoroughly. Unfortunately, because of this oversight, the client’s borrowing capacity was reduced by an astonishing $150,000, a significant setback for anyone looking to buy a home.

It’s essential for borrowers to understand that personal loans and car loans can have a far reaching impact on their overall financial picture. Not addressing these factors up front can lead to missed opportunities or unexpected challenges down the line. Always keep your broker informed about any significant financial decisions to ensure you’re maximising your borrowing potential.