Do I qualify for an investment home loan?
Investment loans are generally a higher risk than standard home loans and, as such, you need to be in a strong financial position to qualify.
The basic lending criteria are:
- You should have 5% – 10% in genuine savings.
- If you are borrowing more than 90%, then some lenders like to see equity in other properties (i.e. this is not your first investment property).
- A good credit history.
- An above-average credit score.
- Stable employment.
- Acceptable postcode or security.
Maximise your borrowing capacity as an investor!
There are some ways you can increase your borrowing power for an investment loan:
- Apply with a lender that has favourable lending criteria for investors,
- Reduce your credit card limits,
- Apply for loans jointly with your spouse so that all of your income can be used,
- Buy positively geared investment properties, or
- A low-fee, low-rate loan with basic features could mean lower repayments, allowing you to borrow more.
Banks differ in the way that they assess investment property loans. Depending on your situation, your capacity to borrow may be increased or reduced.
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