How much will the bank lend you?
Most Australians are comfortable with borrowing money to buy a property. We believe its important to use a specialist mortgage broker who understands investment property and what your future growth plans are.
A specialist investment lender should work hand in hand with your advisors to ensure –
- The best chance of getting your loan approved,
- The most appropriate lending product and rate for your circumstances,
- Compliance with strict lending guidelines set down by the government.
Lenders will look at many criteria when assessing you for a loan. The most critical things for property investors are :
- Your ability to repay that loan (known as your Debt Servicing Ratio or DSR); and
- The amount you wish to borrow and where the deposit and costs will come from (known as the Loan to Value Ratio or LVR).
- The concept of Mortgage Insurance – which is a fee paid to the lender if you need to borrow more than 80% of a property’s value, (known as Lenders Mortgage Insurance or LMI).
The concept of Mortgage Insurance – which is a fee paid to the lender if you need to borrow more than 80% of a property’s value, (known as Lenders Mortgage Insurance or LMI). As you run out of equity, LMI is crucial to growing your portfolio.
Australian banks are amongst the most prudent in the world when it comes to lending standards so you can be sure that if they say yes, you can comfortably afford your loan. Sometimes that loan amount may be less than you were hoping for as different banks have different criteria for assessing you against a loan. Its another reason to use a specialist mortgage broker who can ‘shop around’ and find the best deal for you.