95% finance is still available for investors. However a lot of investors do like to keep their leveraging down to 90% to allow a buffer on each investment property.
This way if the market drops by 10% they still sell their property without having to contribute much to the sale of the property. This will also save you in mortgage insurance keeping the lending down to 90%. You maybe a more aggressive investor and happy to take your finance to 97% and we are happy to assist.
One topic of discussion that is of interest with property investors is cross-collaterisation. This term relates to one bank cross linking and taking security over multiple properties.
This option initially can look easier to manage your property loans however it does give that one bank control over all of your properties. If you were ever to fall behind in repayments on one loan the bank can potentially charge a higher default rate on all of your mortgage accounts not just the one account. There can also be more complications should you wish to sell one of the properties and the value of the property portfolio has reduced from when the lending was originally setup. You cannot assume that you will have access to the full sales proceeds when the loan is cross linked with other properties.
Having your mortgage accounts set up with different banks alleviates these risks and gives you more control over your property assets.
I can generally show you how to borrow more money using different lenders for each property. As a general guide when working out what you can borrow through one bank they will allow a 1.5-2% buffer on all over your lending with that bank. If we spread the lending between different banks they may only take the actual repayments of your other loans without having to add a 1.5-2% margin. This can allow you to borrow $50,000 – $100,000 more dependent on which lending we are looking at. Some lenders are setup better for property investors than others. This is where we can sit down and discuss your personal position and investment portfolio options in more detail to structure your finance to your preferred requirements.
Whether your looking to buy your first investment property or add to your portfolio we are here to help you. Simply complete the form and we’ll get back to you.