Please read this first. 🏡
A car loan can reduce your borrowing power by up to $150,000.
Here is a simple example:
- You are a couple with 2 kids
- You earn a combined $150,000 per year
- You take out a car loan with repayments of $1,200 per month
That $1,200 monthly repayment could reduce your borrowing capacity by around $150,000…. Yes, $150,000.
This means before you even start looking at homes, your budget could already be much lower.
The bank does not focus on the car price.
They focus on the monthly repayment.
That repayment reduces how much you can afford to repay on a home loan.
So For First Home Buyers, before signing for a new car, ask yourself:
• Are we planning to buy a home during the car loan term
• Will this car loan limit our choices?
• Should we check our borrowing power first?
A new car feels great. But make sure it does not cost you the home your family really wants.
