Five tips to get a better home loan on your investment property

Tips to get a better home loan for your property

The decisions you make when selecting a home loan and choosing how to manage your Perth property can have a huge impact on your success as a property investor.

Just as you shouldn’t invest in the first property you see, you shouldn’t necessarily settle on the first home loan you’re offered.

Here are five tips to help Perth’s property investors get a better deal on their mortgage:

1. Shop around

 Whether you decide to go through a bank or a mortgage broker to get your home loan, you will need to shop around to find the best deal for your individual circumstances.

Different lenders will offer different interest rates, features and loan repayment structures – so don’t rush into the first deal you see.

Before you make any big decisions, you need to work out your monthly repayment budget. This could ultimately determine the loan value and interest rate you can afford to pay.

You will also need to consider a long-term financial plan before deciding on different repayment structures.

2. Don’t be afraid to negotiate

The Australian home loan market is never short of lenders, so don’t be afraid to negotiate for a more competitive mortgage rate.

Many lenders will be willing to offer you a discounted rate if it means they remain ahead of their competitors.

Similarly, don’t be afraid to let your current lender know you’d consider switching for a cheaper rate. Most lenders would prefer to offer you a better home loan deal than lose your business.

Regularly researching Perth’s home loan market for the most competitive rates is key, as this will form the basis for your negotiations.

3. Know your assets

You’ll be in a much better position to negotiate a home loan deal if you already know the value of your Perth property.

Before settling on a mortgage deal, you should research similar properties in the area to get a sense of how much your property is worth. Make sure to consider any additional factors that could add more value to your investment (such as location, recent renovations and nearby transport routes).

Lenders consider the value of your Perth property before offering a loan, so knowing your stuff before you start negotiating could help you secure a better home loan deal.

4. Maintain a good credit history

When banks or mortgage brokers consider offering you a home loan, they want to ensure you’re not a high-risk borrower.

If you can keep on top of your credit card balance and demonstrate a clean history of on-time loan repayments, this will increase your chances of getting a better deal on your mortgage.

A low credit rating, on the other hand, could lead to a higher mortgage rate or possibly hinder your chances of securing a home loan altogether.

5. Demonstrate job stability

Before offering you an attractive home loan, lenders will want to know whether you have a stable income.

Along with a clean credit history, long-term employment will show banks and brokers that you are more likely to make your loan repayments on time.

Before taking out a mortgage, you will have ideally held a position with the same company for several years.

I’ve taken out a home loan. What’s next?

Once you’ve secured a home loan, it’s time to start thinking about how you will maximise returns on your property.

Whether you’re an experienced property investor or new to Perth’s property market, the specialist team of property managers at Rentwest can help you get the most out your property after investment.

With the right advice from Perth’s property management specialists, you could see increased investment value and high returns on your property for years to come. This could ultimately put you in a better position to negotiate the terms of your home loan in future.

For more information on our specialised property management solutions, contact via email at rentals@rentwest.com.au or call 08 9314 9888.