Experienced investors generally have a system of finding new investment opportunities as well as dealing with the day-to-day issues of funding and managing their investment. On the other hand, it seems as though there is a lot of information to process and forms to fill out when you are a first time property investor. Finding a property investment loan that suits your requirements can be daunting, however a little forethought, planning and specialist help can make the whole process a lot quicker and simpler.
Do Your Sums And Be Organised
Investment loans from banks and other lenders are very similar to other loans such as home loans or personal loans. The first step to finding the right investment loan is to think about your budget and estimate how much you will be able to afford, both for a deposit (generally10%) on the investment but also for the ongoing payments of the mortgage. When you are working out the math, don’t forget to include purchase costs, application fees and other fees and charges as you go – make sure you read all documentation provided by the banks or lenders and ask them about any hidden costs associated with the loan.
Thinking about issues such as potential income from the property will also be important, as lenders will often consider this when calculating how much you will be able to borrow.
Another important step in getting an investment loan is to have all the relevant documentation organised and handy for when you have meetings with banks or lenders. You can usually find the type of information you’ll need on the banks’ websites or you can contact them to ensure you have exactly the right documentation they will require. Many people choose to apply for an investment loan with the bank where they have their personal accounts or other loans as this can sometimes reduce the amount of documentation required to set up the loan.
Investment Loan Options
A good property investment strategy as a first time investor is to look around at the different investment loan options on offer from the major banks and other lenders. Because of the surge in activity in the property market and low interest rates, competition between the banks for investment loans is fierce at the moment. Shopping around for the best loan is worth the time and effort involved if you find one that meets all of your requirements, and in fact property experts suggest you look at the widest range of banks and other lenders as possible. You can also use a mortgage broker to help you find the best and most competitive loan for you.
Options to look out for in an investment loan include:
- Interest only loans
- Line of credit loans
- Different repayment opportunities
Especially if you’re looking at an off the plan development, property experts suggest that you talk to a professional investment company such as Ironfish who will be able to guide you through the process of investment loans, finding the right property and setting sensible strategic goals. Ultimately property investment for beginners starts with a little research and planning, as well as sound financial assistance and expert property investment strategies. Finding the investment loan that’s right for you can help you achieve your financial goals that much quicker.