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Credit reference
Your lender is going to do a credit reference
check on you. They’ll be looking at any
credit applications made by you and will be
checking if you’ve defaulted on payments or
have an infringement referenced either in your
name or your company’s name if you are self
employed. Make sure that you have a ‘clean
slate’ by checking your credit report.
If something appears that you are unaware
of, advise the agency immediately.
You can
order your personal credit file online. Enter
your personal information, pay by credit card
and your credit file will be forwarded to you as
a PDF file.
Howmuch can I borrow?
Know your limits.
The amount you can borrow for your
investment property will depend on many
factors: your deposit or other equity you hold,
what you are buying, the expected rental
income, whether you will be negatively or
positively gearing the property, property
management costs and if you have allowed for
a period of vacancy. This is where we can help
you to work out how much you can borrow
and what type of loan will suit your budget
and lifestyle.
It is common to include some of your
capitalised assets in your loan with some
lending institutions allowing up to a 97% LVR.
The way you structure your investment loan
will depend on your personal circumstances
and should be discussed with your accountant
or financial advisor.
What deposit will I need?
Lending criteria varies between lenders and
fluctuates according to the presiding market.
Lender’s mortgage insurance (an additional
one off fee) may be applicable if you are
borrowing more than 80% of the purchase
price. Contact the office and we will confirm if
this insurance is applicable.
Deposit bonds
A deposit bond is a guarantee to the
vendor, by an insurance company, that they
will receive their 10% deposit, even if the
purchaser defaults on the contract of sale.
You, the purchaser, are able to provide this
guarantee to the vendor by paying a small
premium to the insurance company.
All purchase funds are paid at settlement. In
the ordinary course of events, settlement takes
place, the purchase price is paid in full and the
deposit bond simply lapses.
Should I buy with someone else?
The most common way to buy a property
with two or more people who aren’t a married
or defacto couple is through a tenants in
common arrangement. This allows the
property ownership to be split in different
proportions (not necessarily into equal shares).
Three people can buy a third each, or it can be
divided in other proportions. This also means
your share of the property can be left to the
person of your choice when you die.
BORROWING ESSENTIALS
Bring a print out of
the credit file to your
appointment with us or call
1300 762 207 to order your
credit file over the phone.
