Tag Archives: private mortgage insurance

Investing in Property

Investing in property? You’ll find it so much quicker and easier utilising a buyers agent based on your own clear financial strategy. Why? Because buyers agent offers you accurate comparison of your options. You won’t need to spend valuable time on prior research, just sit back and compare properties, loans or broker providers.

Investing in Property
Investing in Property...want to maximize the performance of your investment property?

In terms of investing in property you can choose between negative geared property or cash flow geared property. If you need help check out property investments weekly webinars held between Monday and Wednesday nights at 8.00pm Eastern Standard Time or  feel free to contact us.

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Creating your shortlist of properties becomes so much more efficient and accurate when you use our unique investment strategy and exclusive buyers agent. We can help you to better understand your required property investments criteria and create for you an easy-to-digest shortlist of options.

Are you a new or seasoned property investor? Want to maximize the performance of your investment property? When it comes to your finances, it pays to make the right choice. Choose your investment strategy based on your personal goals.

Which of the following should you do before you start investing in property?

  • Sell your home
  • Check your credit score
  • Shop for furniture

Why check your credit score well ahead of the investing in property process? Because if you discover an error, you’ve got plenty of time to go through the official process of correcting it.

When investing in property should you be shopping for a loan? Which status should you seek to give you an upper hand with a seller?

  • Pre-qualification
  • Pre-approval
  • Pre-reviewed

Its important when investing in property to get pre-approved for a loan. Although pre-qualification is free, it’s unofficial and often unreliable. Pre-approval means a lender has looked into your credit and financial situation more closely and will make you look like a serious buyer to the seller.

What is amortization?

  • Process of taking out a second mortgage
  • Process of drowning in debt from a mortgage
  • Process of paying off the mortgage gradually

Amortization is the process of paying off the principal of a loan in incremental payments that gradually chip away at the principal.

Which of the following mortgage terms gives you the maximum tax advantage?

  • 15-year fixed rate
  • 20-year fixed rate
  • 30-year fixed rate

The 30-year term gives you the maximum tax advantage by having the greatest interest deduction.

What percent down payment should you make in order to avoid having to get private mortgage insurance?

  • 20 percent
  • 35 percent
  • 45 percent

Unless you pay at least a 20-percent down payment, you’ll also have to pay private mortgage insurance (PMI). This can sometimes be pretty expensive, so it makes sense to put as much into your down payment as you can.

How much should you expect to pay for a professional home inspection?

  • $50 to $100
  • $200 to $500
  • $800 to $1100

Professional Inspections cost anywhere from $200-$500 but are well worth it. Even with new construction, there can be hidden problems that only a professional inspector may find.

Which of the following types of real estate agent works for an office that does not take listings of any kind and represents only buyers?

  • Exclusive buyer agent
  • Single agency buyer agent
  • Dual agent

An exclusive buyer agent represents only buyers and does not list properties. A single agency buyer agent (SA) works for an office that represents both buyers and sellers but will not represent both in one transaction. A traditional buyer agent might work as a dual agent, representing both buyer and seller in one transaction.

If you sign an agreement with a buyer’s agent, which kind of clause should you make sure the contract includes?

  • Fee escalation clause
  • Release clause
  • Lemon clause

Make sure you have a “release clause” in your buyer’s agency agreement just in case you find out you just don’t like your agent. This will allow you to sever ties without any future problems.

After a seller has told you he has agreed to accept your offer and then backs out, what’s your legal recourse?

  • You can sue and most likely get the house back.
  • You can sue for fraud and damages, but you probably won’t get the house in the end.
  • You have none because a verbal agreement is non-binding.

Unfortunately, there’s not much you can do short of pleading with the seller. Verbal agreements aren’t binding, and you’ll find that you have little legal recourse.

Which of the following isn’t a typical fee you’ll have to pay in closing costs as a buyer?

  • Seller’s agent fee
  • Notary fee
  • Escrow fee

The seller is responsible for paying the seller’s agent, not the buyer. The escrow fee is a typical fee for a neutral third party to hold the funds during negotiations. A notary should be paid to notarize the documents.

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Investing in Property

Property Investment Loans?

What You Need to Know About Investment Loans?


Investing in property? There are a range of residential investment loans to meet the varying needs of property investors. In fact, property investment loans are not too different from any other type of home loan.

Property Investment Loans for when deciding on the right investment loan most people only consider the interest rate.

Property investment loans include many other considerations like (hidden) fees you pay which can include:

  • Application/establishment fees, range from $0 to $1,000 and more depending on lender and the type of loan you need
  • Ongoing fees can range between nil to $550 per annum
  • Early exit fees/penalties from $0 to thousands
  • Fixed rate loan and economic costs
  • Discharge fees in order to get your title back you need to discharge any mortgage held over it, lenders charge differing fees
  • Mortgage insurance fee depending on lender/insurer, which is calculated using a percentage of loan amount (LVR)
  • Additional lending costs, charged to access any additional funds you have paid on your loan (redraw)
  • Fees charged for changing the security over loan and switching loan products also vary between lenders
  • Valuation costs and legal fees should also be considered…

Property Investment Loans, it’s important to tailor the correct product to suit your investment needs.

property investment loans
Property investment loans


Property investment loans example…let’s say you want to maximise the most suitable finance structure by using the best tax structure discussing the options with your tax professional.

Property Investment Loan Types: Property investment loans are no different to home loans. Interest rates, fees and lending policy are very similar:

  • Variable rates
  • Fixed rate loans
  • Line of credit
  • Construction loan
  • Low doc loan

All these types of loans are available for investment property loans.

It does not really matter what type of loan you choose just as long it fits your investment strategy using an interest rate which is competitive and fees (as discussed above) are not excessive.

Property investment loans considerations: professional packaged loans that allow you to put multiple loans under the one package which can help to save on establishment costs and ongoing fees.

Line of credit loans can be used to access equity from an existing home, used as a deposit or to purchase an investment property. If you already own a property, a line of credit is a good way for you to tap into any equity you’ve built up in property which can be used as a deposit for buying investment property.

A line of credit loan allows you to draw from a fixed amount at any time to pay for whatever you want. It’s kind of like a credit card with a big limit but the equity in your home acts as security for the loan.

Interest only loans and principal and interest facilities may be better utilized depending on your personal circumstances and investing objectives. Interest only loan the principal remains the same.

You only pay the original amount you borrowed when you finally sell investment property as this type of loan is useful for investors because your monthly repayments are less than they would be if you were paying off principal as well.

Fixed or variable rate loans also depend on borrowers risk profile and property investment strategy.

Long term property investors with a long term views prefer fixed rates so they know exactly what their repayments are.

Interest Only or Principle and Interest: Interest only loans allow you to only repay interest on the loan without reducing the principle loan amount.

This can assist in allowing a borrower to reduce non-deductible debt or bad debt more quickly. Principal and interest repayments allow debt to be reduced and more equity to be established.

Most property investors prefer interest only loans for the following reasons:

  • Investment interest repayments are tax deductible
  • Principle payments are not tax deductible
  • Principle payments are better utilised via personal non tax deductible debt which reduces amount paid each month freeing up cash flow…

Property investment loans like other loans means you can choose fixed, variable or split interest rates with flexible features like redraws, etc…

Property Investment Loans