If you want to join the thousands of others who purchase investment properties but you don't have the cash, you might think you're out of options. Luckily, that's not the case. You might not realise this, but you don't need to pay cash for investment properties. In fact, most investors start out with an investment loan. Loans are a great way to take advantage of investment opportunities, especially where property is concerned. However, there are some steps you need to take to improve your chances of securing an investment loan. Here are three of those steps.
Maintain Stable Employment
If you're ready to purchase an investment property but need to secure a loan first, take steps to maintain your employment. Lenders take a close look at employment history when considering approval for an investment loan. There are some things you can do to show a stable employment history. First, don't change jobs when you're trying to secure an investment loan. If you do plan to change jobs, wait until you've purchased your investment property. Second, if you're self-employed, start gathering your client information as soon as possible. Stable income from self-employment will increase your chances for approval.
Ensure Adequate Deposit
If you've decided to invest in property, and you need to apply for an investment loan, you'll need to provide a deposit on the purchase. In most cases, you'll be able to borrow about 80% of the total purchase price, which will leave another 20% that will need to be provided in the form of a down payment. Because all loans are different, it's best to have a slightly larger cash deposit ready before you apply for your investment loan. That way, you're not locked out if the lender requires a larger deposit.
Provide Savings History
If you want to finance the purchase of your investment property, now's the time to start a savings account. If you have a checking account, you might not think that you have a need for a savings account, but that's not necessarily the case. Savings accounts are a great way to show financial stability. In fact, they can show your lender that you're prepared for financial emergencies, which can increase your chances for approval on your investment loan. For maximum benefit, try to start your savings account several months before you apply for your investment loan. That way, you can show a strong savings history.Share