According to data from Mortgage Choice, investors currently account for almost 30% of all home loans written – higher than previous years.
That’s more than one in every four loans written. It is fair to say this market segment is booming.
Penrith mortgage broker Paul Holland said it is unsurprising to see an increasing number of investors entering the property market given that interest rates are currently hovering around record lows and property prices are on the rise.
Paul Holland identifies the top three tips investors should consider if they are looking to borrow more than 80% of a property’s value.
A dense idea: Some lenders will not finance a unit located in a high density apartment block. High density apartment blocks are usually three to four stories high and have more than 30 units. A mortgage broker will be able to explain to you why this is the case and identify which lenders will lend and those that won’t.
Size does matter: If you are considering purchasing a studio or one bedroom apartment, be warned, some mortgage insurers won’t approve finance for properties that are smaller than 50m2. And while some mortgage insurers may be happy to count a car park or balcony when calculating the size of the dwelling, others will not. A home loan specialist, like Paul Holland will be able to let you know which lenders and their respective mortgage insurers are more flexible than others.
Location, location, location: When buying an investment property, location matters. If your property is not close to transport, shops and other amenities, it may be hard to find tenants for the dwelling. Worse still, if the property you are looking to purchase is heritage listed, situated near high voltage power lines or in a flood affected area, you may have trouble financing the property. There are a variety of reasons why Australia’s mortgage insurers may be hesitant to approve finance for a dwelling, so it’s best to check with your mortgage broker before agreeing to purchase a property.
If you want to learn more about your home loan options, call your local Penrith home loan specialist Paul Holland on 0410 787 607.