Good investment loans easy to find in Australia

Whoever said that it was hard or expensive to get an investment loan must have been looking for one in all the wrong places. Many lenders are still actively competing for investors as they have not exceeded the Government Banking Regulator’s 10% investment lending growth ‘speed limit’.

Many lenders are still offering loans to investors at higher loan to value ratios and competitive interest rates. The major banks who have exceeded the Government Regulator’s investor growth limit are getting out of investment loans and some are now spruiking that the investment market is dead. It does not even seem to matter that the data says the opposite.   This smacks of If I can’t play I will close my eyes and shout that the property market over. But with so much demand for property in Australia’s two largest cities, Sydney and Melbourne, no one wants to hesitate only to have to pay thousands more for a comparable property next week. Anyone who has attended an Auction in Sydney or Melbourne recently knows that the demand is stronger than ever as are prices.

Here is the tip to getting a good investment loan. Don’t bother going into a bank branch. Don’t bother going to a mortgage broker that is owned by a bank. These places don’t give you a lot of choice even if you are not an investor. Go to an independently owned mortgage broker who has access to a wide range of lenders including non-bank lenders. You will find out that there is plenty on offer for property investors with competitive loan packages to boot. Find more info about what kinds of investment loans are still available here: investment loans

There may be an affordability issue in Sydney but the Melbourne market median house prices are around $200,000 cheaper than Sydney and are just starting to really take off. The most recent property price growth data shows that Melbourne has overtaking Sydney as the fastest price growth city and prices are growing even faster than before. The big banks may be disappointed that they can’t lend to investors in this growing market but this will just give the lesser known lenders a chance to show off their investor loans expand their investor market share. These new Government Regulator measure are levelling the playing field for lenders and introducing more competition that is long overdue.

 

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Construction loans: how do home construction loans work

Construction loans

Building your dream home can be an exciting experience. Taking an idea and turning it into reality can be a rewarding experience if done right. When you build your own home you can decide how you want it to be.

It is not always trouble free. Constructing a home can be a long and expensive process and there are many possibilities that things can go wrong.

If you are borrowing money for the construction of the home then the lender is also taking on the risk that something will go wrong. The major risk is what the finish building will be worth. Some of the other risks include the quality of the builder. If the builder does not finish the building it can be very difficult to sell an unfinished home without providing a significant discount on the price. Even if the builder does finish the home, if the quality of the finished home is poor then the value may be less than expected.

Lenders don’t like taking on a lot of risk and will put in measures / requirement to reduce this risk. In the case of lending to build a home some lenders offer home construction loans, with all their strict criteria, specifically for this purpose.

Typically, a qualified and licensed builder must be engaged. Furthermore, the lender will want you to have a fixed price contract (not a cost plus) with the builder so the lender knows exactly how much it will cost to finish the building. Owner builder construction loans are available but generally only for builders who are building their own property. This means that you may have an especially hard time finding an institution to finance your project if you are intending to be an owner builder.

Having a fixed price with a licensed builder is only one of the many requirements of getting a construction loan.

Did you know that some lenders will allow you to use a construction loan for a three or even four units/townhouses development? If you are undertaking a small development contact us to go through your options.

Find out more about construction loans

Find out about the requirements and process of getting and using a construction loan. Everything you need to know.

Construction loans

Oak Laurel Mortgage Brokers – Construction loans made easy!

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What is a Mortgage broker?

“A mortgage broker is an intermediary between the borrower and the banks or lenders. Mortgage brokers usually specialises in home loans and other loans for individuals where as a finance broker specialises in business or commercial loans. A mortgage broker can help you compare the suitability of different mortgages to find a one that is suitable for you. Your broker then negotiates with banks or other lenders on your behalf to arrange your loan and manage the process through to settlement.”

Why use a mortgage broker?

“Your home loan is probably the biggest expense you will ever have. Differences in the rates, fees and features between mortgages can add up to thousands of dollars over the life of the mortgage. A good mortgage broker has access to a wide range of lenders and loans. Therefore, using a mortgage broker can make a big difference to your financial situation.”

What to look for when choosing a mortgage broker

There are some key things that you should consider before choosing a broker:

• Does the broker have access to a wide range of lenders?
• Are they experienced?
• Do they specialise in the type of loans that you are looking for?
• Is your mortgage broker independently owned or owned by a bank?
• Is the broker company a one man band, big brand or boutique brokerage?
• Does the mortgage broker company have a local broker option?

Find out more here: mortgage broker wikipedia

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