Getting the right home loan to suit your needs as an investor is one of the most important parts of the process. The right loan can save you thousands of dollars and help move you closer towards financial freedom.
It was often thought that if you went into a bank today and had a look at their loan packages, you had plenty of time on your side to decide what to do. You could take several weeks or months to compare various loan products with other lending institutions, and then go back to your original bank and get the same offer.
Well, I have to say – those days have gone!
Nowadays banks are every bit as competitive as the large retail stores with their lending rates, lending criteria and lending packages. What you get offered today could be different tomorrow and what you get turned down on today you may get accepted for tomorrow.
This is one of the reasons why borrowers are increasingly using mortgage brokers. Brokers have at their fingertips access to hundreds of different loan offers, promotions and packages, meaning they can compare different lenders' packages for you, literally within minutes.
When working out how much to borrow, caution is the key here. Always ensure that you will be able to meet your loan repayments and that you have some spare in case of emergency. I’ve seen many investors get in over their head because they fail to “stress test” their investments and instead, blindly go along with whatever their bank is willing to offer them.
Just because a lender is happy to lend you $600,000 that doesn’t mean you should necessarily borrow that full amount. Allow for the fact that interest rates may go up and ensure that you can meet the extra increases.
Don't forget that you can email me direct at email@example.com or phone 1800 600 890 and ask for Paul if you have any queries about any area of property investing that you’d like to discuss.