Have you been thinking about investing in property lately? A lot of people consider getting a foot on the real estate ladder to help them establish on-going financial security. The only problem is, some investors often feel as though they have to spend a huge amount of money before they can make anything as a landlord.
At Home Loan Cash Back, we can help with everything you need to know about mortgages. While investing in real estate can often be a costly business, there are plenty of things that you can do to improve your chances of success and maximise your money. Here are just some of the tips we suggest you follow when making your money work for you.
Tip 1: Use Interest-Only Loans
Although an interest-only loan isn’t always the best ideal for someone buying real-estate, it can be a good choice for people who are just getting started as an investor. With an interest-only loan, you can improve your borrowing power while you work your way up the real estate ladder.
If you’re looking to retire with a great property investment portfolio under your belt, you’re going to need to get a few different properties in your portfolio. That means choosing a home loan structure that helps you to take advantage of the most borrowing power available. Interest only loans can be great for this, as they minimise the amount you have to pay each month during the early stages of your investment.
Over time, you’ll be able to buy more properties, faster, and push your way towards a bigger portfolio.
Tip 2: Browse the Market
Though it can be tempting to stick with what you know when it comes to choosing a lender, building your investment property portfolio is a process that can go much smoother when you use a mortgage broker like Home Loan Cash Back to get the best deal for each property.
At the same time, by using different lenders for each property, you’ll be able to avoid the dangers of cross-collateralising your assets. This happens when the loans on two of your properties become linked. When your loans are linked, if you want to sell or refinance one of your properties, then the lender could request that you pay the other loan off first.
Using the same lender frequently could also mean that your properties are valued as a single asset. This means that a single failing property could reduce your ability to improve your entire portfolio. Additionally, the lender could limit your borrowing options, and impose additional restrictions on your LVR.
Tip 3: Consider Lender’s Mortgage Insurance
Most lenders don’t realise that they can still purchase a property with only a 5 or 10% deposit. This means that you won’t have to spend as much of your own savings to buy your property faster. However, you need to buy the right type of property in place that your bank feels can deliver capital growth, and you will also need to take out LMI, or lender’s mortgage insurance.
Basically, lender’s mortgage insurance protects your mortgage provider in case you can’t make your repayments. Although this comes at a cost, you might find that paying LMI is cheaper than the extra dollars that would be required to secure a property.
Tip 4: Get a Cash Back Mortgage
Finally, the easiest way to make your money work for you is to get a cash back mortgage with Home Loan Cash Back. When you get a cash back mortgage with us, you’ll be able to earn money on your mortgage every month. Not only do you get 100% of the broker trailing commissions as mortgage cash back, you also get award winning service.
The fact that you’ll be earning a little bit back on your mortgage, or mortgages as cash back will make your financial situation much easier to handle.
Why not get started today?