There are different factors that can affect the terms of your investment loan. Research your options first before you apply for an investment loan.
The real estate industry has gone on a rebound since it experienced a crash. The National Association of Realtors (NAR) reveal that 85% of metro areas saw increases in the cost of single-family home prices in the first three months of 2015 and 14% saw a decrease. If you plan to invest in a property, here are some tips on how you can finance it well.
Make a Huge down Payment
If you have mortgage insurance, it will not cover your investment property so make sure to at least make a 20% down payment. If you can increase it to 25%, you may be even eligible for a better interest rate.
Check Your Credit Score
Before trying to borrow money, check your credit score first. Expert lenders such as those on vystal.com.au explain that it will have a huge impact on the terms of your loan. If you have a low credit score, you may have to pay a high-interest rate to get a good deal on your loan. Aside from your credit score, bank reserves and personal investments can also have an impact.
Avoid the Big Banks
If the required down payment is not that big, consider getting a loan from a community bank instead of a large financing institution. They will offer more flexible loan terms because they have knowledge of the local market. Another option is a mortgage broker. They will offer you different kinds of loans that could suit your financial situation.
Consider Owner Financing
Be vigilant when choosing this option. Owner financing is more acceptable these days given the tightening of credit that lenders implement. You have to convince the seller on your need for financing.
Investing in a property can provide you with a good source of income in the long run. However, you need to do a thorough research to find the right lender for your investment property.