- By admin
- In Building wealth - Finance for investors, First things first - Steps before applying for finance
Many people plan on buying an investment property, and save hard for their deposit. If this is your goal, it’s important to make sure your investment property deposit is big enough. Changing lender rules have had a big impact on how much investors have to save.
Investment property deposit – is yours large enough?
First of all, it’s important to realise that lenders all have hugely varying rules about investment lending. Some lenders are stricter than others. As a general rule, lenders will have stricter rules for investors than for owner occupiers.
There are a number of factors lenders consider when deciding how much you can borrow, and how much you need to have as a deposit.
One factor, as odd as it may sound, is the postcode. Lenders may say decline you for a certain amount, purely based on the postcode of the property you’re looking at. Some suburbs are listed as high risk, and are subject to capped lending that can require as much as a 40% deposit! This can come as quite a shock to would be investment buyers.
When working with clients for who this may be an issue, we help them by confirming with a prospective lender as to what postcode areas are acceptable.
Another important factor, is the type of property. The size of deposit required, varies between units, townhouses, and houses. Lenders are becoming increasingly restrictive on lending for small properties, such as units under a set size. These restrictions can mean that a larger deposit is actually required for smaller properties.
When you factor in our first point – that lender rules about investment lending in general, vary hugely, it can become quite hard to find the right lender.
A helping hand for investors
At Bee Finance Savvy, we like to make things as simple as possible for our investor clients. Not only will we help you work out if your investment property is large enough, but we’ll help you work out where you can buy, and what sort of property you can buy.
We’ll also help you navigate all the other complexities of applying for investment loan. So if you want a mortgage for an investment property without all the stress and headaches, get in touch with us today! Our friendly broker Desiree has helped many customers along their journey to buy an investment property.
If you’d like to hear from just some of our satisfied customers, take a look at our reviews on WOMO https://www.wordofmouth.com.au/reviews/bee-finance-savvy-miranda