Borrowing Power Basics: How to Boost Your Chances Before Spring Auctions

Borrowing power is the amount a lender is willing to loan you based on your financial situation. It determines how much you can realistically spend on a property. 

Lenders assess your borrowing power by looking at: 

• Your income 

• Existing debts (like credit cards, car loans, personal loans) 

• Living expenses 

• Credit history and score 

• Number of dependants 

• Current interest rates 

If you’ve ever been surprised by a loan amount that’s lower than you expected, borrowing power is usually the reason. 

How to Improve Your Borrowing Power 

Boosting your borrowing power before spring auctions can give you the edge when competing against other buyers. Here’s how: 

1. Reduce Your Debts 

• The lower your debt, the higher your borrowing power. 

• Pay down credit cards (even unused limits count). 

• Consolidate small loans if possible. 

• Avoid taking on new liabilities before applying for a home loan. 

2. Review Your Living Expenses 

• Lenders now closely examine your bank statements. 

• Track your spending for the past three months. 

• Cut back on non-essentials like streaming subscriptions or online shopping. 

• Show consistent savings habits. 

3. Increase Your Income (Even Slightly) 

• Even small boosts can improve borrowing power. 

• Consider overtime, side hustles, or freelance work. 

• If applying jointly, factor in your partner’s income. 

• Rental or investment income may also count. 

4. Improve Your Credit Score 

• A stronger credit score = more confidence from lenders. 

• Pay bills on time. 

• Limit the number of credit enquiries. 

• Check your credit report for errors. 

Why Borrowing Power Matters at Spring Auctions 

Auctions move quickly. If you don’t know your maximum budget, it’s easy to overbid — or worse, miss out on a property you could have afforded. 

Having a clear understanding of your borrowing power gives you: 

• Confidence to bid with certainty 

• A clear upper limit to avoid financial stress 

• Better chances of securing finance approval quickly after the auction 

How a Mortgage Broker in Bathurst & Lithgow Can Help 

At Sparks Finance, we specialise in helping first home buyers and homeowners in Bathurst and Lithgow understand and improve their borrowing power. We’ll: 

• Assess your finances and calculate your true borrowing capacity 

• Compare loans from 30+ lenders to find the best fit 

• Structure your loan to improve affordability and flexibility 

• Get you pre-approved so you’re ready for auction day 

If you’re aiming to buy this spring, start preparing now. By boosting your borrowing power and getting pre-approval in place, you’ll be ready to act quickly and confidently when the right property comes up.