Investment Mortgage improves your asset value
Investment property is meant to increase your wealth by extra asset. We also structure Investment Mortgage to repay your own mortgage off quicker.
Our structure makes home safer. See us before you buy!
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- We explain you how Investment Mortgage works
- How and Why it is safe
- We explain you what you will be paying
- How it could be repaid earlier
When buying investment property, one should also consider:
Why borrow ? – Borrowing for Investment Mortgage usually is better than paying with cash!
Do not look to pay your home off first!
- What to look out for in property investment
- How to invest to avoid/minimize LAND TAX
- Types of investment properties
- Common terms
- Using existing equity from your home – but not security
- Refinancing for Investors
- Steps of buying an investment property
You can use equity for the investment property (instead of cash).
Some banks may tell you, that they will lend you 100% of the new property. What a rubbish!
If you do not have equity or cash, they would not lend you anything.
Equity is the difference between, what your home is worth, and how much you owe it to the bank. More accurately – usable equity level for lending is difference between 80% of value, and amount of loan. Using higher level (to 90%) will involve LMI (Lender Mortgage Insurance)
It’s that simple.
There are two options:
A. For example: ( figures in low numbers for simple demonstration)
If you go direct to the bank (or an average Broker) the Bank will combine (cross colaterise) both homes – they will give you 100% loan for investment property if you have enough equity in your home, thus the one Bank holds both Titles. Investment Mortgage is based by your home. equity.
But there are two ways to use equity:
A. Cross collateralising properties together for value and possibly having two loans (most people use this, because they do not know better way)
Providing you demonstrate that you can service the loan, the Bank will lend you the money.
In above scenario Your home is in danger if anything goes wrong with your investment property.
Suppose that you bought property above its value – How would you know? You assume that since the Bank has provided you with a loan, price must be right. Not True! The Bank will still lend you the money if they have enough equity.
To illustrate this point:
Suppose you bought the property for $200,000, but is only worth $150,000. Does this ring a bell with some stories you have seen on TV or in the Newspapers?!?
Let’s examine the following to the above examples:
You cannot sell your home without “refinancing” the investment home.
So – what do we advise you to do?!?
Option B. Better way to use your equity – separated securities
(we show you how to apply the loan)
Separate your home from your investment property !
“Security is No 1 priority!”
We show you, how to separate the two properties, and also increase your “Safety”, if something happens to you (ie; you lose your job, you get sick, etc), and you can not earn money for a while , or investment lost tenant, etc.. – your home will still be safe. We provide you with a “Safety Belt“.
Suppose that you have an “Ordinary Mortgage”, and you lose a job temporarily and can not meet mortgage repayments – You could lose your home.
We show you how to do it better!
With an “Equity Loan” you not only have more security, but should also be able to repay your loan quicker, without paying extra. (Other examples on the website… (“Reduce your Loan Term” etc..)
Key Points to Note for your property’s ecurity
1: “Safety is Number 1” We separate your investment from your home with another bank, and your investment interest is still 100% Tax deductible.
2: You use the “Interest Only” loan from the new lender for the investment property. (pay off your home loan first)
3: You can also use some money and put it into an investment fund of high yield, (or manage fund yourself) which would allow you to pay your mortgage off quicker.
4: Rent from investment property helps to pay your home mortgage off quicker.
5: You can always choose the best lender at the time of a new purchase (or refinance) – you are not tied to the Bank that holds your home mortgage
6: There are 6 other “major” reasons and a number of other minor reasons why you should separate security, which we will show you at the time of an appointment.
7: We can recommend to you a specialist in the property market, who can best advise where to purchase an investment property.
8: We can also recommend specialists who can show you how to protect yourself in the case where your tenant does not pay rent.
9: By analysing your financial situation, we show you how to utilize the best investment strategy (or recommend of a Financial Planner) – through exposure to other investment vehicles, etc.
Don’t let one property effect the safety of your other assets!
…but if you do have structure from Banks – see our rate – bank do not beat it!