đźš— How a New Car Loan Reduced a Couple’s Borrowing Capacity by $100,000 đźŹ
đźš— How a New Car Loan Reduced a Couple’s Borrowing Capacity by $100,000 đźŹ
We recently worked with a couple earning $55,000 and $75,000 annually, with no dependents and a solid financial setup:
Self-employed income with $21,530 depreciation, $2,973 in interest expenses, $49,000 in company profits, and $3,923 in allowable addbacks.
Rental income of $600 per week from an investment property.
With this strong financial position, their borrowing capacity came in at approximately $1.3 million.
âś… However, shortly after, we were told they'd taken out a new car loan for around $55,000, with monthly repayments of $918.
This reduced their borrowing capacity to $1.2 million — a $100,000 drop, just from one financial decision.
đź’ˇ Lesson: If you're thinking about buying a car and applying for a mortgage, always speak to your mortgage broker before taking on new debt. Even seemingly manageable car loans can have a significant impact on how much you can borrow.
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