Investment property loans are one of the most common loan products on the market today. An extremely popular way to build your wealth is with property investment, and if you’re a first time investor or an experienced investor, we are skilled with the lending side and can help you to build your portfolio.
There are lots of differences and similarities between investment property loans and standard residential home loans. Investment loans tend to have stricter eligibility criteria due to higher risk. In addition, interest rates tend to be a slightly higher for investment loans. As with residential home loans, you can choose between a fixed rate or a variable rate investment loan, or a split between fixed and variable rates.
Generally speaking, investment loans usually require a higher deposit amount and you can factor in 20% as the going deposit amount required as a minimum or an investment loan.
Investment loans generally carry two significant options – interest only loans and lines of credit loans. Interest only loans involve paying the interest portion of the loan only and not paying off the principal. This is advantageous because it reduces the amount that needs to be paid each month, and the principal generally only needs to be paid when the investment property is sold. Lines of credit loans are also nice to have because they allow an investor to redraw against equity at anytime.
We deal with many investment loans of varying complexity to suit the single property investor through to the multi-property, large portfolio investor.
Importantly, for the single property investor or first time property investor, we can help develop a strategy tailored to your circumstances that will assist you to build your portfolio, and ultimately your wealth. In doing so, it is helpful to have the right strategy in place from the start of your investment career to allow for the quickest growth path possible.
Equity in your own home is a good starting point for property investment. The equity in your home can be used in place of a cash deposit allowing you to enter the investment market without having to save for years and years. If you have over 20% equity in your home, you might be in a great position to begin investing in the property market and build your property empire.
Note that with any type of investment, property investment will have an impact on your tax circumstances It’s always a good idea to discuss any plans for investment with your accountant first.
If you’ve made the decision to invest in property, it is critical for your success to carry out thorough research on the property. Make sure you understand and confirm the likely rental amount and outgoings. Use conservative amounts so you’re not basing any decisions on a better than average scenario.
Our extensive experience and access to a large product range ensures that we will deliver to you the best solution available on the market today. We will happily help any investor no matter what level of experience.