You need to be clear on what your short-term and long-term strategies are, so sound judgment by the Credit Advisor can create/fashion a seamless experience and to ensure the loan facility is “not unsuitable” (NCCP) where it involves a residential property.
Use your Tax Agent, Accountant, Solicitor, Quality Surveyor, and Financial Planner to formulate your specific strategy of why you are entering the rental property market. Is it for positive (passive income) or negative gearing (tax strategy), capital gain (wealth creation) or for retirement (self-managed superannuation) strategy?
Investment loans come in many shapes and sizes, with varying pricing options, set-up and on-going fees, repayment options and, terms and conditions.
The lender (bank, building society, credit union or mortgage manager) are different in pricing, features and benefits in their product range, criteria and policy. But their assessing guidelines are rarely dissimilar. Several do not use the negative gearing effects.
They are also different in whether they will take a proposal from a Trust (Discretionary, Unit or Hybrid) Fund, Self-Managed Superannuation Trust Fund, and a company.
Your preparation is the key.
The Credit Advisor can assist calculate the amount of loan required and mortgage insurance if it is a requirement.
Be prepared to do market research on growth of the rental market, expectations of tenants, what Government schemes exist or are proposed for landlords and tenants. Whether the residence should be two, three or four bedroom, furnished or unfurnished.
Know where you wish to purchase and be comfortable in your choice of location. Whether the residence requires work (and to what extent) or the property is to be brand new, or a pre-existing residence clean/vacant ready to move in.
Is there a tenant lined-up to move-in on settlement day?
The purchase price might not match the lender registered valuer’s market value estimate. The lender will use the lower of the contract price or the valuer’s.
Investment Home Loans
Capital Works or Improvements
Refinancing and/or with debt consolidation
Transfer loan to a new home – portability