Most property investors would be familiar with the concept that you make your profit when you buy. That is, buying wisely from the outset is the greatest determinant of how much profit you will ultimately make from your investment property.
No matter how long you may hold the property for or how creative you may be in adding value to the property, if you have overpaid for the property from the outset, it will erode how much profit you realise on your investment. Hence the reason astute investors spend a considerable amount of time doing their homework and then negotiating hard to ensure they purchase their property at the best possible price in order to maximise returns.
Similarly, securing a good deal on the loan you use to finance your property purchase can have a significant impact on the long-term success of your investment.
So how do you find the right finance deal? Well, in the same way that it is very unlikely you’d purchase the first house you viewed from the first real estate agent you spoke with, chances are you’ll need to look around. But just as with the properties themselves, some of the best home loan deals are not always obvious to the uninitiated. For example, in this current environment, there may be greater flexibility for customers who already do business with a lender. At a time when lenders are generally only lending a maximum of 90% of the value of a property, some will lend up to 95% for those who already have an existing facility with them.
But which lenders offer this? Some lenders require you to have another credit product, like a credit card , while others want to see you have a transaction account. And how active does the facility have to be? In an environment where bank lending policies are regularly changing – and tightening – smart advice on the best finance deals on offer (particularly those that are not always well publicised or explained) can have a huge impact on your investment plans.
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