Are you a property investor?
Property investors use credit differently than non-investors.
BORROWING POWER
Often investors want to maximise their borrowing power to maximise their exposure to capital gains in the property market.
Knowing which lenders to use and the order to use them in can make a big difference in your borrowing power. This means the lender they choose needs to be carefully selected.
Certain lenders allow greater amounts of rental income or other incomes types for serviceability.
Others have lower assessment rates for serviceability and/or debts at other financial institutions.
LOAN STRUCTURE
Loans for investors often require a different structure than typical owner occupier home loans.
They need to be structured to maximise tax deductible debit while allowing you to pay down non-deductible debt ahead of deductible debt.
For some, an interest-only loan could be the most effective strategy at certain stages of their investment strategy. For others, a principal and interest loan may be better suited.
While a line of credit loan might give some investors the flexibility to move quickly, for others it may become a liability.
Your Money Tree broker will help you define the best strategy for you.
We’ll make the process as simple as possible for you.
Nb. This is not tax or financial advice – please speak to a qualified professional for advice to meet your specific circumstances.
DEPOSIT
Often first time investors assume they’ll need a deposit to buy an investment property, but many banks let you use the equity in your own home to secure the entire cost of purchasing your investment property.
Alternatively, you may have cash but your broker will look at strategies to maximize the tax deductibility for this amount.
