Picking The Right Property Investment Loan For You

Posted on: March 4, 2011

Categories: Other Articles

Author: lbuen

2247354638 fbfa191c70 m Picking The Right Property Investment Loan For You

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Obtaining a property investment loan is a vital part of financing real estate investing. Without which, you have to have a deeper pocket to invest in property on your own. Before, getting a property investment loan, you must study the different types and pick the one that caters to your specific needs.

The Flexible Property Investment Loan

The standard variable rate property investment loan is typically offered by all investment loans. It offers a low interest rate. However, this rate may increase, subject to changes announced by the reserve bank. A gamut of features typically accompanies this kind of loan allowing you flexibility in repaying the loan.

The Stable Property Investment Loan

Just like the variable rate loan, the standard fixed rate loan is also offered in most, if not, all investment loans. By availing of this kind of financing, you can lock in the interest rate for a specified period. With this fixed rate, you are assured of paying the same amount for the set period. The fixed rate makes this type of property investment loan less flexible, but the predictability of the amount of payment helps establish financial stability.

Property Investment Loan That Can Secure Another Loan

With an equity property investment loan, you can invest in another property as it enables the borrower to unlock the equity in the loan. By doing this, you can save money since the loan will be completely secured.

Property Investment Loan That Allows You To Buy Time

Another option for investors is the interest only loan offered by a number of creditors. If you need ample time to look for and screen tenants or some time to settle other obligations, then this type of property investment loan may be for you. The interest rate being used here is not fixed but all you need to pay is the interest rate for a certain period, until you have the funds to pay for the principal, such as when you start collecting rental fees from tenants already.

Matching The Right Property Investment Loan To Your Needs

Having familiarized the different types of property investment loans, the next step you have to take is to pick one that suits you best. A mortgage calculator may help you make this decision. Using this, you can conveniently compare different loans simultaneously. Be sure to prepare pertinent details regarding the property investment loan as these are needed for the calculator to arrive at the computations. However, bear in mind that calculators may have certain assumptions that may not be applicable to your situation, thus, its calculations may not be reliable all the time.

Watch Out For Additional Charges

When comparing different loans, factor in additional fees that may be charged by some types of property investment loans as they can jack up the payments due.

When picking the right property investment loan to suit your needs, familiarize the different types and study the terms and consider the one that charges the least interest rate and the payment option that best fits you.

 Picking The Right Property Investment Loan For You
pixel Picking The Right Property Investment Loan For You

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