There are several factors that separate investment mortgage brokers from real estate brokers who focus solely on providing home loans for primary residences. The main difference between the two is that the investment mortgage broker truly wants to make your loan work for you. While regular mortgage brokers also want your loan to work and will always try to achieve that goal, investment mortgage brokers will pull out all the stops to make it happen.
You Should Know About Investment Mortgage Brokers
The most successful property investor will have an extensive portfolio to their credit. However, as they continue to acquire properties, it may become increasingly more difficult for them to borrow the money they need to finance them. Hitting what is known as the “serviceability wall” or the borrower’s ability to repay a loan is one of the biggest obstacles for investors when they are purchasing more properties. This is one of the areas where an investment mortgage broker can help.
As you continue growing your property investment portfolio, having too many loans with the same bank or lender could become a problem. There are a couple of reasons for this. First banks and lenders regulate how much risk they will take with individual borrowers. Second, banks will apply additional “loading” to the interest rates on ensuing loans which reduces the investor’s overall serviceability. Furthermore, every lender uses different criteria to assess a person’s borrowing capacity.
This can make a tremendous difference in the amount you want to borrow in the future. For example, will the lender include the new property rental in your income? How much of the rental is included? What is the assessment rate for calculating serviceability? All of these factors help determine how much you’ll be able to borrow for other properties in the future. However, as a property investor, it’s not possible to know the criteria for your eligibility that different banks and lenders are using.
Fortunately, the right investment mortgage broker knows these criteria which enable them to determine who you should borrow money from. It’s always smarter to obtain your financing from lenders who follow strict eligibility criteria. In order to do this, you may have pay off some of the debt you’re carrying while at the same time maintaining a good credit score. However, this could enable you to purchase more properties later on because of having access to more deals from lenders who pose fewer restrictions. Thus, having a good credit history can help you get lower interest rates.
Contact Your Trusted Mortgage Expert Today!
For more information about investment mortgage lending, call Granite West Funding at (559) 540-2275 today. Our advisors are available to help you with your custom requirements so call now.