Once you’ve secured your investment home loan, there a few more steps before you get the keys to your property at settlement. These are:
- Paying the deposit
- Signing the contract
Compare different interest rates
One of the easiest ways you can compare home and investment loan rates is to calculate the comparison rate of the loan.
The comparison rate takes into account the costs associated with setting up a loan including the nominal interest rate(s), loan approval fees and any other up front or ongoing fees. The comparison rate does not include government and statutory fees, since these are standard regardless of the lender or type of loan. It also doesn’t include other fees and charges that are ‘event based’ and which may or may not apply throughout the term of your loan, for example, redraw fees, or early termination costs.
Investment Property Tips
- Most investors use equity from their home for their deposit – but leave yourself wriggle room.
- Hire a quantity surveyor to work out a depreciation schedule for your property.
- Understand the difference between positive cash flow and negative gearing.
- Do your research. Then do some more.
- House or apartment? No right or wrong answer here – just more homework!