Getting The Best From Your Loan
INVESTMENT LOAN
Key criteria for choosing an investment loan:
We think the following are the most important factors in choosing a lender for successful wealth building:
The lender must have a panel of independent valuers.
- The valuation should be a full valuation - not kerbside or 'drive-by' valuation
- The valuation relied on by the lender should be disclosed to you, the investor
- The valuer should use comparable sales in the area to determine value
- The valuer should be flexible in revisiting valuations as comparable sales indicate growth
The lender should offer an Interest Only period of up to 10 years (or 5 + 5 year terms).
The owner's own home should not be cross- collateralised with the investment property
The lender should be prepared to include no less than 80% of the projected rental income from the property in your income, for the purposes of credit assessment.
There should be no hidden fees: administration charges and so on
The lender should give you the option of using your equity, at least within a year, to duplicate.
Investloan's Panel of Lenders all provide loans that meet the above criteria:
In some cases, our lenders can provide an initial Interest-Only period of ten years.
Every six months, you have the opportunity to top-up your loan to a maximum of 90% of the revised valuation figure.
None of our lenders charge a monthly or annual fee.
We provide you with a copy of the Full Valuation that was relied upon by the lender.
Our lenders directly debit repayments from your nominated bank account. So there is no need to change any of your bank accounts or take up new credit cards.
Our lenders do not take a mortgage over your home. They only hold a mortgage over your investment property, allowing each property to 'stand alone'.
Statements are issued June and December each year. As the loans are Interest-Only, there are only two entries each month (debit interest and repayment).
OWNER OCCUPIER LOAN - CMS
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The criteria for choosing a loan for your own home are not as critical as for an investment loan. Every lender has a range of loans to choose from, and the interest rates and charges are broadly similar across all the major banks.
At Investloan, we understand that each individual client's requirements are different. However for the majority of our clients with an owner-occupied loan, we recommend a Basic Variable Rate Home Loan with a major bank. |
| Do not be fooled by claims that you can 'pay your own home off sooner' using Line of Credit facilities and Offset Accounts. These loans are at a higher interest rate, and you need a strict budget for them to work. |
We find the Basic Variable loan is under-rated by other brokers. Fancy 'debt-reduction' programs are written around Offset Accounts and Lines of Credit. But there is no secret to paying your home off early: all you have to do is make extra payments!
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"Having a basic variable home loan, paying fortnightly and making extra payments along the way, beats paying a higher rate for a line of credit loan."
