Property investment is a great way to earn a stable income and have some left for the luxuries in life. But you don’t have to wait years and years until your savings match the price. Consider taking out an investment loan, which some lenders will grant to those who meet the criteria.
How Hard Is It to Get?
It can be difficult to qualify for an investment loan rather than a home loan. If you are unable to prove your ability to keep up with payments, it will be especially challenging. The first and basic question is to ask yourself if you are capable of taking out such a big loan and paying it back. If the investment is worth it, you should be able to make payments monthly and eventually profit.
The standards require you to be in a good financial situation. Your genuine savings have to be at five to ten per cent of your income. You also need proof of a stable income, a good credit history, and an even higher credit score.
If you have borrowed money for other investments before and are borrowing again for 90% more, then lenders will need to see your equity.
How to Increase Your Chances
If you want to increase your borrowing power, there are a few ways to get there.
One of the most common ways is to increase your credit score. Pay off your credit card bills and settle any other loans. Start reducing your credit card limits.
Another way is to take out a joint loan so your combined income will be considered. Remember, however, to exercise caution when doing this. A joint loan needs both parties to have a stable income in order to pay it off.
And if you’ve done all that you can to qualify for an investment load, look for lenders that won’t give you such a hard time. The ideal company will handle these things with precision and care so that you can get the best deal for your investment.
Important Things to Know
Banks and lenders don’t focus too much on your other records outside of finance. You need to be transparent with your financial accounts so they know that you are capable of handling these loans. Aside from base salary, you have to disclose bonuses, commissions, profit from sideline businesses, inheritance, trust distributions, and dividends.
Another noteworthy thing they focus on is your existing debt. That includes your mortgage, auto loans, or personal loans. They will look at the principal and interest repayments—even if you’re only paying interest. Make sure to approach the right lenders who will give you a fair assessment. Ask for transparency on how they calculate everything together. If your borrowing streak strikes them as negative gearing, they will make some calculations based on their rules and regulations.
Getting an investment loan can get you started with your long-term financial goals. Even with the high risk, you will be able to earn the money back in time if it’s worth your investment. So take a long hard look at it and make sure you’re making an informed choice instead of a gamble.
Every property business has to start with some capital. For an investment loan with great rates in Perth and nearby areas, finance is made easy with FinanceCorp. All of the Finance Managers at FinanceCorp are fully qualified, trained, and experienced mortgage professionals who live and breathe finance. Get a better loan now!