Getting Your Investment Mortgage
Getting an investment mortgage to buy a property is not a very difficult thing. In our consumer friendly environment you just need to do some research and find a well qualified mortgage broker. In fact, even in Australia it was the overdrive of the banking and financial institutions in giving away loans to even sub-prime customers that led to the recent global recession having an effect on today’s lending policies. Though, banks are considerably cautious in giving out loans today, with a few simple measures, it is still relatively easy to buy a property of your own by applying and getting an investment loan.
Steps To Get Investment Mortgage:
Here are the basic steps to gaining your investment mortgage or home loan:
1. Identify the amount of personal financing (deposit) you are ready to contribute when you buy a property. Banks today are asking between ten to twenty percent deposit to be paid and they will only fund the balance. Therefore, the higher the deposit is you are able to provide, the greater the possibility of getting a loan would be.
2. Always have more than one property to choose from, when you approach a bank. Every bank has its own policies when providing loans, especially with certain developments or certain localities. Also, if the property is too small in size, i.e. less than fifty square meters in size, there is a greater chance that your application might be rejected. Hence, have multiple options when approaching a bank in case you miss out on your first option.
Know Your Numbers:
3. Make sure you know the value of the home you are purchasing. Its no good offering too much to have the bank tell you its not worth as much as your offer. Getting a valuation done by a qualified valuer is worth the cost involved. Its even worth trying to get a valuer from the a banks panel of valuers. This can ensure they take some weight from the valuation from a regular advisor.
4. Negotiate with the banker on the term of the loan, the interest rate, the type of payments etc. Remember that even if the banker uses the words that it is our bank’s policies etc, it can still mean there is some scope of negotiation. It’s the old saying- You will not get if you do not ask!
5. At worst case if you don't have a substantial deposit for your loan, be ready to provide additional collateral security. Furthermore this could mean having another property you can use as an underwritten security (this is generally risky and not usually advised), or by providing additional guaranty in the form of a surety by a close relative. These are both confidence building measures for the bank and they would find it easy to process a loan with collateral security as they have control over more property with a an overall smaller loan in proportion.
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