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What Is An Investment or Investor Loan?
Investment Loans are home loans that specialize in investment properties. The term “investment properties” is a vague one and it spans widely between a simple rental home to a large sprawling multi-unit building. This type of mortgage is a special one due to the fact that the borrower will have income derived from the property to assist in paying back the loan.
“I needed a loan to buy my next investment property and had a hard time getting banks to look at me. VIP Finance Brokers fixed that problem with no issue and got my investor finance sorted quickly and simply!”
How Do Investor Loans Work?
Typically, the borrower selects the property in question and does their due diligence on the property first. This due diligence takes form in doing research about the property, how long has the property been around, how much rent has the owner charged to their tenants in the past, Is there a tenant turnover issue with the property, how much are the yearly costs that it takes to maintain all of the amenities and utilities, etc.
Once the borrower has completed their research and deemed the property as a decent investment, then the submission to the lender begins. The borrower puts down a deposit on the note correlating to their creditworthiness and the lender provides the rest of the capital in the form of the investment loan. Investment Loans typically carry a higher interest rate and also have higher deposit requirements than standard home loans.
Comparing Investment Home Loans
We have the tools to provide comparisons from more than 4,000 home loans to figure out the best rates for your investment loan.
We can display different home loans by their rating or their interest rates to narrow your list down to a lucky few candidates. You can also change these lists around by inputting different selection criteria with the filter option. With this filter option you can also account for other less-common factors such as fees and additional features on the note including redraw facilities and offset accounts.
Interest Rates and How They Compare
The Interest Rate is usually the first thing that potential homeowners think about when applying for a loan. The obvious goal is to get the lowest interest rate possible through research and comparison with similar loans. Each percentage point that you can knock off of that rate through using our tools can help you save thousands over the life of the loan. Our tools provide you with the best comparisons around due to the fact that we also factor in fees and other charges that are not included with other comparison sites.
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Frequently Asked Questions
Does Australia Have Restrictions For Investment Properties?
If you’re an Australian citizen, there are no restrictions as to who is eligible for an investment loan. Australian citizens also have no limit as to how many properties that they can own either with any type of building included.
Residents of Australia who aren’t citizens can buy one dwelling to reside in and can purchase new buildings or vacant land to develop into an investment property. They are restricted, however as they can’t buy established dwellings as an investment property.
This restriction on established dwellings for investment properties also extend to non-residents of Australia. Non-residents can only purchase new dwellings, dwellings under construction and vacant land.
These restrictions were put into place to keep established dwellings available for first-time home buyers and owner occupiers. Had these restrictions not been put into place, investors would snatch up most of these established dwellings for themselves to rent out.
What Should You Look For When Searching For An Investment Loan?
Our site provides all of the little things that you need while searching for an investment loan. You can compare features such as offset accounts and redraw facilities and you can find out which loans can be paid off faster with the ability to make additional payments.
We consider these features when we value a loan on our site:
* Security Requirements – How much money do you need to provide up-front to get the loan?
* Additional Repayments – Can you make payments outside of the usual monthly payments? Some loans are locked in when it comes to a repayment schedule and won’t allow any additional payments to be made. You can pay the note off much faster with this ability to make additional payments.
* Loan Transfer Ability – Can you transfer a loan from one property to another with no hassles or issues?
We have other features that we look at as well such as split loan availability, offset loan availability, and redraw facility availability. For more information on investment loan comparisons and what you need to qualify for these loans, contact us today!
What Are Some Of The Things To Think About With An Investment Loan?
There are many things that you need to consider when getting an investment loan. Chiefly, you have to make sure that your investment loan monthly payment is covered every month. In most cases, your tenant’s monthly rent payment to you will cover this investment loan payment every month.
But, you also have to consider that you may run into some months where the tenant can’t come up with the payment on time or even worse, you may run into the possibility of having no tenant on the property for lengths of time. In these cases, you have to have the income and money available to make the payment yourself when it calls upon you to do so.
To that end, you should approach an investment loan as a form of business loan because in the end, you’re running a business when you have an investment property.
You’re providing a service to the community in the form of affordable housing to someone who needs it. Therefore, you should provide the best quality housing that you can with amenities included such as quick repairs to household fixes, proper lighting if a car park is included with the building, etc.
When a landlord provides excellent service and communication to their tenants, it strengthens the relationship between landlord and renter and lengthens the occupation for the tenant at the property.
This in turn guarantees that you won’t have to go into your pocket very much to make your investment loan monthly payment.
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