When you do not own an existing property:
Many people think you need to own your own home outright (with no loan) before investing in property but this could not be further from the truth!
Similar to purchasing your own home, you need to have savings to contribute to the purchase. Lenders will normally provide up to 90% of the value of the property so you need to come up with the remaining 10% plus the costs related to the purchase.
As an example, let’s consider purchasing an investment property for $500,000 in Victoria:
With a loan at 90% of the property value - $450,000
There are always costs involved when buying any property.
- Loan application fee $600
- Lender legal fees $300
- Your legal fees $1,500
- Registration of Mortgage $135
- Stamp Duty $25,070
- Registration of Transfer $1,369
- Lender’s Mortgage Insurance $10,000
Total Costs $38,979
Therefore, your contribution is $88,979, which is the total of the purchase costs and your 10% deposit.
If this sounds like something you’d like to do or you’d like more information, contact us today on (03) 9877 6471 or email@example.com