Knowing the Top 5 questions for your investment property financier will help you when you need to borrow funds to buy your investment property.
But where do you start? My suggestion would be to begin by visiting your own bank or personal lending institution. This is where you will most probably have an established relationship but also they will have a history of your financial records and borrowing history.
From there, I would recommend you meet with at least two finance brokers in order to gain comparison rates.
NOTE: the interest rate is not the most important factor but certainly in the top three. A cheaper interest rate isn’t a reason to change institutions. An example is that some language can appear to offer a good rate but in the long run perhaps not. i.e. a honeymoon rate may be cheap in the short time but once that ‘honeymoon’ period is up it can become quite expensive.
Let them come back to you with the best option that will suit your future goals of investing.
The 5 top questions to ask are:
- What is the interest rate and fees associated with the product you recommend?
- What options and flexibility do I have with this loan?
- Will I be able to redraw funds or open up an offset account?
- Can I pay more off my loan than the minimum payment?
- Do you offer interest free terms?
If you combine all of these factors, this is where you will see that sometimes the lowestt rate may not be the best option for your investment property plan.
Make sure you have flexibility built in to any loan contract you sign to ensure you can adapt your finance terms if need be.
As always, if you have any questions, leave a comment below.
Until next time,
From the desk of Christine.