Investment loan differs from your personal home loan in a lot of ways. And so, there is a difference in how much you can borrow if you are looking at buying an investment property.
The major concern that our customers have when considering real estate investment is income. Is my income enough to buy an investment property? I have already got a home loan. Will bank give me another loan to buy an investment property?
While it is an obvious concern to have, the solution to that is to go through the numbers.
Consider what your total income is. A good starting point is your household salary. Add up all the sources of income. Also, add the prospect rental income.
Then consider your expenses. Make sure you list out all your expenses. We can help you with that as most of the times we do not know where we spend money. Along with that, also consider rental property expenses.
Now comes another concern – do I have enough funds to contribute towards the purchase? The savings that I had was used in buying my home. I have not been able to save up much.
You won’t be able to borrow 100% of the property price even if you can afford the loan amount. So, once we know how much you can afford, we can then look for the source of funds to complete the purchase. One of the most common sources can be the equity from your existing home.
Once you have the understanding of how much you can afford, how much funds you will have to purchase, we can then source the right investment loan for you.
Always understand, even if you can afford to borrow a certain amount, you do not want to borrow to that limit. Always have a budget in mind to start looking at the investment properties. As you will have other costs involved while buying an investment property – for example stamp duty, conveyancing fees and more.
Comments