What’s the difference between an investment loan and an ordinary home loan?
Most of the same types of home loans and loan features apply for investors as for owner occupiers. Some lenders may charge higher rates for investment properties if the associated risks are higher.
Can I use equity in my home as a deposit for an investment property?
Banks will usually accept equity in a home (or other property) as additional collateral against which they are prepared to lend. This means you could potentially borrow the full purchase price of the property, as well as all costs (stamp duty and other fees) without having to contribute any cash. When we meet, we can go through the options you have available.
What is negative gearing?
If the rent you get for an investment property is less than the interest repayments, strata fees, maintenance and other costs, your investment is negatively geared, or making a loss. This loss can be offset against your income, reducing your income tax bill.
How much money can I borrow?
This amount varies from lender to lender based on your individual circumstances. Please call me to provide you with an accurate assessment.
How do I choose the loan that’s right for me?
I will do the research and recommend suitable loan options based on your individual circumstances.
How much do I need for a deposit?
This forms part of your initial negotiation and it is important to only offer a deposit which you can fulfil.
How much will regular repayments be?
Current rates and the loan term will determine your monthly repayments. Go to my Repayment Calculator for an overall idea. Contact me to find out which is the best deal currently available based on your individual circumstances.
How often do I make home loan repayments — weekly, fortnightly or monthly?
Most lenders offer flexible repayment options to suit your pay cycle.
What fees/costs should I budget for?
There are a number of fees involved when buying a property. To avoid any surprises, the list below sets out all the usual costs:
- Stamp Duty – this is the big one. All other costs are relatively small by comparison. State and Territory Governments charge different rates of stamp duty from each other. Stamp duty costs also depend on the value of the property you buy. You may also have to pay stamp duty on the mortgage itself. To find out your total Stamp Duty charge, click on our Stamp Duty Calculator.
- Settlement Agent fees — These will be charged by the settlement Agent you appoint to help you through the home loan process. These fees, which include title search fees, are usually around $1,000 – $1,500.
- Building inspection — This should be carried out before the purchase of a property by an expert, such as a Structural Engineer, to ensure it is structurally sound. The cost can be up to $1,000 depending on the size of the property.
- Pest inspection — Also to be carried out before purchase to ensure the property is free of problems such as white ants. Allow up to $500 depending on the size of the property. Your conveyancer will usually arrange this inspection, and you will usually pay for it, as part of their total invoice at settlement.
- Lender costs — Most lenders charge establishment fees to help cover the costs of their own valuation as well as internal admin fees. Allow about $300.
- Moving costs — Don’t forget to factor in the cost of a removal firm if you plan on using one.
- After buying — As well as regular loan repayments you should take out building insurance and contents insurance. If you are borrowing more than 80% of the purchase price of the property, you’ll also need to pay Lenders Mortgage Insurance. You may also choose to take out Mortgage Protection Insurance.
If you have bought a strata title, regular strata fees are payable