How much deposit will I need?
When you’re considering your next property purchase one of the first things you need to consider is what kind of deposit you can afford. This will in turn dictate the price of the property you’re looking to buy. As a general rule of thumb, most lenders will look at applying a LVR (Loan to Value Ratio) of 80%, but they can go as high as 90% or higher, but this comes at a cost as LMI (Lender’s Mortgage Insurance) will need to be paid. Just remember, the LMI is designed to protect the lender should you default, not you as the investor. In addition, bear in mind you will also need to pay stamp duty (which is worked out as a percentage of the purchase price) and legal costs associated with the purchase, so factor these into your upfront costs.
Which lender is the best for investment properties?
When you are ready to go out to the marketplace make sure you choose a lender that can offer you the right loan to suit your particular needs and requirements. It’s also important to remember, all lenders have different appetites and criteria for risk and eligibility. While the majority of lenders will lend on investment properties, they don’t all work to the same set of policies when it comes to the approval process. It is also important to look beyond the interest rates being offered and checking to see if the loan contains features that fit your financial situation. Loan features are designed to help you in a variety of ways – including managing your finances and reducing the length of your mortgage. The best features, however, are those that allow you to significantly cut the cost of the loan, helping you save thousands of dollars in the long run.
Do I need pre-approval?
Getting a pre-approval is not essential, but should definitely be considered as one of your first steps when looking to buy an investment property or home. That way, when you see something you like, you can act on it with confidence because you know the bank has already looked at your profile and has essentially decided to lend you a specified amount so long as you satisfy the conditions you have agreed to. As a buyer, that ability to act quickly gives you a distinct advantage. Pre-approvals can last up to 90 days, so it gives you plenty of time to source your property. Another advantage of pre-approvals is that it significantly reduces the approval time for your loan as you have already submitted the necessary paperwork to the lender for consideration.
If the risk of future rate rises is causing you concern about your ability to manage your mortgage repayments, or you just want to explore your borrowing options, don’t wait, get in touch with us now.
As indicated by the RBA Governor, the likelihood of further cash rate rises in the coming months and potential years ahead is almost a certain guarantee.
So, if you want to look at getting yourself into the best possible position to manage your mortgage repayments, your family budget and minimise your financial risks, get in touch with us today so we can explore all your finance options.
Our experienced brokers have access to the latest loan facilities being offered by lenders and can assist you with making the right decision to suit your personal situation. From new loans to refinancing and fixing the best rates, to private lenders for your property development deals, we have the knowledge and expertise to help you find the right loan.
