Property Investment Loans
Are you thinking about stepping into property investment but are unsure how to access the finance you need? If so, we’re here to help.
Taking out a loan for your investment properties may just be the very thing you need to help get you started or to take things to the next level. Unlike the process for taking out a personal home loan, there are far more factors to weigh up when taking out a property investment loan.
At Morgan Finance, our experts can help you find the right loan for your needs and avoid common pitfalls. Book your consultation with our experts today!
Securing a Property Investment Loan
The risks associated with investment loans are different from what they have been in the past. As an investor, you’ll need to complete much more thorough research upfront. Having the right experts in your corner can make all the difference when it comes to avoiding these risks.
As the years have gone by, lenders have also started to add more restrictions about who can take out investment home loans.
It is now more important to understand what lenders look for before you apply for an investment loan. It all comes down to doing your homework. Know the area you’re looking to buy in like you know the back of your hand. Check if there are any council restrictions affecting investment capacity as well as any restrictions lenders have for properties in that area.
At Morgan Finance, we can help you gather this information so you can successfully receive the investment finance you need.
What Makes an Investment Loan Different?
The purpose of an investment loan is strictly for purchasing an investment property that will generate income for the owner, either through renting or other means.
These loans have some big differences compared with standard home loans including:
- Stricter eligibility requirements
- Larger upfront deposits are needed
- On average, the interest rates can be higher
- Any expenses on investment properties can be claimed as tax deductions
- If you sell the property, you’ll need to pay capital gains tax
Our Top Tips for Avoiding Investment Loan Risks
Risk assessment always starts with a thorough understanding of your financial standing and considering the best financial decision given your circumstances. Understanding your risk profile is also just as essential.
Different investors handle risks differently and what may seem like a big threat to you is less so to someone else with a different investment profile.
When assessing properties for investment, you’ll also want to ensure that you avoid common pitfalls. Make sure you do your homework upfront!
Are you 100% sure the property is geared toward increasing in value? Is it structurally sound and free from building or pest issues?
You’ll also want to ensure that the property is within your long-term borrowing capacity. Future-proofing yourself and your investment is no easy skill yet it is one that has high returns for years to come.
Our expert mortgage brokers can help you understand your financial position and capacity to borrow for an investment property. Start future-proofing your investment today by booking in a consultation with our experts!
What to Look for in an Investment Loan
There are two key factors to compare various loans against; fees and features.
Interest rates for investment loans are higher than those for a standard home loan. As such, comparing the total expected cost over the course of the loan can help you ensure you won’t face a slew of unexpected costs down the line.
Some elements to consider are:
- The loan establishment costs
- Lender’s Mortgage Insurance
- Any continuous fees and charges throughout the term of the loan
- Early exit fees if you pay the loan off in good time
- Discharge or settlement fees
- Break fees if you change the loan’s structure
Investment loan features vary as much as lenders do. Some features will be more favorable to you than others though it’s worthwhile to consider features such as:
- Access to offset accounts and redraw facilities
- Ability to pay off the loan faster
- Top up facility
- Ability to make additional payments
- Security and guarantees
- Fixed rate, variable rate or split rate options
- The loan’s portability from one property to another
It pays to have experts by your side as you negotiate the best terms on your loan. Book your initial consultation with our team and let us help you find the perfect investment loan with all the features you’re looking for.
Call about investment lending today 0429417949