Of course, getting a loan even before you go looking for a property to buy is possible and it may even be preferable, since that kind of gesture can make you look like a serious buyer to the real-estate agents. Also, you can do it for your own piece of mind, because everything is easier when you know exactly how big your budget is. A ‘pre-approval’ normally lasts for 3-6 months, with a possibility of extending the time for another period. To get an unconditional approval is a little bit more complicated and requires some other paperwork, but that, too, can be done.
There are two types of mortgage insurances. The LMI (Lenders Mortgage Insurance) usually goes for loans with a Loan-to-Value ratio (LVR) of over 80%, and it covers the lender, in case of loan default or a significant loss at the time you re-sell your property. This is a once-only payment, and in some cases the amount of the money paid via LMI is added to the actual loan. The MPI (Mortgage Protection Insurance) on the other hand, covers your monthly payments in case of death, or temporary or even permanent disablement or unemployment, in short – anything that can make you fail to give back your monthly rates. In most cases, it is not a direct request by the lender.
Interest-only repayments allow you to repay your loan with interests only. They are a good way to go if you’re, for example a new borrower, rather than going with the regular principal and interest repayments. Your mortgage broker and financial advisor should both know a thing or two about these, and they are viable to give you some quality advice on what would suit your needs best.
If your goal is to invest only, you’ll need to know that the longer you own a property, the more its value rises and you can use this equity to buy more properties. It is advisable for you to consider how much you should borrow, if there are any tax benefits, or maybe an LMI option which depends on the deposit and purchase price. Investing in property can make your life much easier, if done right and if you concentrate your capital in the right places and in the right ways.
There is a difference between paying principle + interest, or paying interest only loans, as we said earlier, so make sure you check all these aspects with your financial consultants or mortgage advisors, they have gone through years of school for such things and they probably know more about what you need than you do, when it comes to property purchase and real-estate, at least totobet.
Be as it may, you’ll certainly have to pay the minimum monthly repayments, these advisors just make it easier for you, and make sure you get exactly what you need. That can ensure that, after making your carefully crafted purchase, you can actually enjoy the fruits of your labor with as little as possible obligations and stress about it. There is an, at least, 80%-strong self-containable solution for every problem, and this is no exception. You just need to ask the right people for advice, or, on the other hand, you can become a sort of an economic/real-estate/banking/loan expert yourself, but that would take some serious time and effort, a commodity you probably don’t have.
