For property investors, it is essential to use a mortgage broker because borrowing becomes more complex. Typically bank branch staff are used to assisting the average home buyer but are far less experienced in dealing with the needs of property investors.
Here are some important factors to take into account:
- How banks calculate how much you can borrow varies much more for investors than home owners. They can treat very differently rental income, tax deduction benefits, and existing loan repayment
- Buying an investment property often involves co-ordinating two loans – a refinance of a property you own already and the new investment property.
- Investment loans need to be structured to allow for easier claiming and verification of tax deductions.
- Buying off-the-plan property can be complex and risky unless you receive the right mortgage broker assistance
- Constructing an investment property is more complex and choice of loan products can have significant impact on your cashflow
- It may be to your advantage to use a separate bank for your home and investment property (see below)
Same bank or different bank
There are good reasons why you would use the same bank for you home loan and your investment property, and also good reasons why you would use a different bank. The choice will depend upon your circumstances.
Larger total loan amount with the one bank means greater ability to negotiate on rate
Your existing home loan bank has prior record of your borrowing and savings which may make loan approval easier
Splitting your loan between lenders means your mortgages and therefore your home and investments aren’t controlled by one bank.
Another bank may have a more favorable loan calculator for investors than your home loan lender