Investment Property Loans

Are you looking to invest in a property? At Hunter Galloway, we can help you maximize your borrowing power and make sure that you attain your investment goals as fast as possible.

To begin with, it is important to keep in mind that the terms of approval for investment loans is relatively complicated compared to other loans. This is the case because investment loans are considered higher risk, relative to regular home loans. As a result, you need to be in a pretty strong financial position in order to qualify. At Hunter Galloway, we have summarized some of the main criteria for being able to qualify for an investment loan:

  • You should be able to prove that you have between 5 and 10% in savings
  • Your credit score should be above average
  • You should be able to prove that you have been employed in a stable job for a period of time
  • If you decide to borrow more than 90%, you should have equity in other properties

Although these are general guidelines of what to expect, if you want to know what is required of you personally, it’s best to contact one of our brokers at Hunter Galloway for more information.

Investment Loan Borrowing Capacity

Are you looking for ways to increase your borrowing power? There are certain things you might be able to do to ensure that you can borrow more as part of your investment and equity loan. Take a look:

  • Reducing the limits on your credit card(s)
  • Applying for the loan with your partner/spouse so that both of your incomes can be considered
  • Targeting lenders that have favorable criteria for clients applying for investor loans
  • Fixing your interest rate for a period of time (three to five years)

Banks differ in the terms that they use to evaluate investment loan applications. Depending on the criteria required, your situation may differ, leading your borrowing capacity to increase or decrease. If you are interested in finding out a way to increase your borrowing capacity relative to your situation, feel free to contact Hunter Galloway for advice.

Bank Requirements For Investment Property Loans

Do banks have requirements regarding the type of property that I am investing in?

Yes, some banks do. However, these criteria also depend on the bank. Generally speaking, we believe these are some points to go by:

  • The property must be greater than 50 m2 in living area
  • It must be in a high demand area, i.e. a town that has more than 10,000 people
  • It must be in a good condition
  • The property type must be a standard house, apartment unit or land and construction

Overall, while this entire process may seem complicated, the investment loan is an excellent option for individuals who are interested in making a particular investment. However, you should keep in mind that borrowing 95% for an investment property is mostly considered suitable for high earning individuals who are in a very strong financial position. In addition, it is important to have substantial knowledge about property investment and experience building a property investment portfolio.

Take a look at some of the advantages of investing in property:

  • Secure investment
    Property investors are known for experiencing fixed returns on their investments, generally with very little risk involved.
  • Tax reductions
    Spending money on this property (e.g. through rates, insurance or maintenance) may be subject to tax deductions.
  • Constant returns
    By renting out your property, you will have constant returns in the form of rent. This will effectively mean that the property will ‘pay itself off.’
  • Asset base
    Having an asset base is excellent because it acts as a guarantee for when you are looking to apply for additional finance.

Investment property loans can be complicated, but if you know the ins and outs of the process, you can get a lot out of them. For more information on how to get investment loans to work for you, contact our team at Hunter Galloway at 1300 088 065.