Your investment property loan at ScaleMortgage
Are you searching for the perfect investment property loan? At ScaleMortgage, we offer investment property loans to help you achieve your investment goals.
Why Invest in Property?
Let’s start by looking at why investing in property is a good idea before we discuss investment property loans.
Stable and Consistent Returns
Property investment is a popular choice for many investors because it offers stable and consistent returns. Unlike the stock market, which can be volatile and unpredictable, property values tend to appreciate over time. This means that your investment is likely to increase in value, providing you with a steady return on your investment.
Diversification of Portfolio
Investing in property also allows you to diversify your investment portfolio. By spreading your investments across different asset classes, you can reduce your overall risk and protect your wealth. Property investment is a great way to diversify your portfolio and add a tangible asset to your investment mix.
Passive Income
One of the most attractive benefits of property investment is the potential for passive income. Renting out your investment property can bring in money regularly without having you to actively work for it. This can provide you with financial stability and freedom, allowing you to focus on other pursuits or investments.
What Is an Investment Property Loan?
An investment property loan is a type of loan specifically designed for purchasing a property for investment purposes. This loan considers the property’s rental income and the borrower’s investment goals, unlike a traditional home loan.
Borrowing for Investment Property
When assessing a loan for an investment property, lenders take into account both the projected rental income and the borrower’s financial circumstances. The evaluation of the property for loan purposes considers both the potential rental income and the borrower’s financial stability. As a result, it is possible to secure a higher loan amount for an investment property compared to a conventional home loan.
Mortgage Terms
Investment property loans typically have different mortgage terms than traditional home loans. These terms may include a higher interest rate, a larger deposit, and a shorter loan term. Understanding how these terms can impact your investment is important before you secure the loan.
Principal and Interest Loan vs Interest Only
When taking out an investment property loan, you will have the option to choose between a principal and interest loan or an interest only loan. A principal and interest loan means that you will be paying off both the principal amount borrowed and the interest, while an interest only loan means that you will only be paying the interest on the loan.
Interest Only Investment Loan
An interest only investment loan can be a good option for investors who are looking to maximize their cash flow. By only paying the interest on the loan, investors can keep their monthly repayments low and use the extra cash for other investment opportunities. Noting that with an interest only loan, you still have to pay off the principal amount at the end of the loan term.
Why Choose ScaleMortgage for Your Investment Property Loan?
At ScaleMortgage, we know property investors have special needs. We provide customised solutions to help you reach your goals. Here are some reasons why you should choose ScaleMortgage for your investment property loan.
Competitive Interest Rates
We offer competitive interest rates on our investment property loans, helping you to save money and maximize your returns. Our team of experts will work with you to find the best interest rate for your investment property loan.
Flexible Loan Terms
We understand that every investor has different needs and goals. That’s why we offer flexible loan terms to suit your individual circumstances. Whether you’re looking for a short-term or long-term loan, we can help you find the right solution.
Expert Advice
Our team of experienced mortgage brokers are experts in investment property loans. We can provide you with valuable advice and guidance to help you make informed decisions about your investment.
Easy Application Process
We know that time is of the essence when it comes to investing. That’s why we’ve made our loan application process quick and easy. With our online application, you can apply for an investment property loan from the comfort of your own home.
How to Get a Loan for an Investment Property
If you’re ready to take the next step and secure a loan for your investment property, here’s what you need to do.
Research Your Options
Before getting a loan, research and understand the various types of investment property loans that are available. This will help you make an informed decision and choose the right loan for your investment goals.
Prepare Your Finances
Lenders will consider your financial situation when assessing your loan application. Ensuring that your financial matters are well organised is crucial prior to submitting a loan application. This may include paying off any outstanding debts and having a good credit score.
Choose the Right Lender Product
When getting a loan for an investment property, it’s important to pick the right lender product. At ScaleMortgage, our experts can help you find a loan that matches your investment goals.
Apply for the Loan
Once you’ve done your research, prepared your finances, and chosen the right lender, it’s time to apply for the loan. With ScaleMortgage, our online application process makes it quick and easy to apply for an investment property loan.
FAQ
How much deposit do I need for an investment property?
To buy a house in Australia, you typically best practice to put down a deposit of at least 20% of the house’s cost. You can use your personal savings or the equity in your home to make this deposit.
Important to remember that the percentage can change depending on the lender and investor’s financial situation. The percentage can vary based on the lender and investor’s financial situation.
Consulting with a financial advisor or mortgage broker to explore all options is a good idea. This will help ensure you are prepared for this investment.
Can I borrow against my investment property?
While owning investment properties builds equity over time, accessing this equity through additional borrowing is subject to various factors. Lenders will comprehensively assess your financial profile, including income, expenses, existing debts, and dependents, to determine the accessible equity. This process ensures that any additional borrowing aligns with the investor’s ability to repay and the lender’s risk criteria. Consulting with a lender or mortgage broker can provide personalised insights and options based on your unique financial landscape.
How much will the bank lend me for an investment property?
Banks and financial institutions typically lend up to 80% of your property’s value, minus any current mortgage debt. This threshold, known as useable equity, is a critical factor in determining your borrowing capacity for an investment property. Lenders enforce this limit to mitigate the risk of the loan surpassing the property’s value, particularly in fluctuating markets. To make accurate calculations and consider increasing leverage, it’s best to work with financial advisors or mortgage experts.
How much can I afford to borrow for an investment property?
To buy an investment property, lenders will consider its value and your debts. They usually offer loans up to 80% of the property’s value, minus any debts you owe.
The loan-to-value ratio (LVR) helps protect against market changes. It ensures that the loan amount is a reasonable percentage of the property’s value. To accurately assess your borrowing power and explore possible exceptions, consider a detailed financial review with a mortgage broker.
How much deposit do you need for a $500000 property?
A 20% deposit of $100,000 is a good start for investing in a $500,000 property. This deposit can help you avoid needing Lenders Mortgage Insurance (LMI).
Some lenders may accept a 5% deposit or $25,000 for those looking to buy a home with less money upfront. However, this is usually under specific conditions. It’s important to note that there may be additional costs involved, such as LMI (Lenders Mortgage Insurance).
Can I buy an investment property with 5%?
Investors may access financing up to 95% of the property’s purchase price, requiring at least a 5% deposit. This option allows you to borrow more money, but lenders will need to carefully review your application. Lenders may also require you to get Mortgage Insurance to protect them from risks in the property market. Preparing a strong financial profile can aid in securing approval for such loans.
How to buy a second property with no deposit?
Many people use the value of their home to buy another property without needing a typical down payment. Equity loans and lines of credit allow you to borrow money for property investment using your home’s equity. You must meet the lending requirements to qualify for this type of loan. This method emphasizes the importance of understanding your borrowing capacity and the implications on your overall financial health.
How do banks treat rental income?
Banks and lenders typically consider 80% of your rental income when determining your borrowing capacity. They also take into account your other sources of income. This conservative approach accounts for vacancies and ongoing maintenance costs associated with property investment.
Some lenders may also consider projected rental income for newly constructed properties. Policies vary significantly among lenders, making it crucial to consult with multiple institutions to optimize your borrowing strategy.
Can I use my super to buy a house?
The FHSS Scheme lets first-time homebuyers take money from their superannuation to help buy a home. This plan helps first-time buyers afford homes by using tax benefits in superannuation to make ownership more accessible. Understanding the specific criteria, contribution limits, and withdrawal processes associated with the FHSS Scheme is essential to fully benefit from this opportunity.
Conclusion
Investing in property can be a smart way to grow your wealth and achieve financial stability. At ScaleMortgage, we offer investment property loans to help you finance your investment and reach your goals. With our competitive interest rates, flexible loan terms, and expert advice, we can help you make the most of your investment. Contact us today to learn more about our investment property loans and other investment opportunities.