Property Investment Loans

What is an investment loan?

An investment loan is an amount of money lent to finance a particular project. In finance, the expected future benefit from investment is a return.

There are various types of investment loans, such as those designed to help entrepreneurs to develop their businesses.

Then there are also property investment loans, which are quite popular.

Property investment loans are not too different from regular home loans.  They are a type of home loan that someone takes out to buy an investment property.

Property investment loans generally have stricter eligibility requirements and investors need to raise a larger deposit before applying for a loan. They also usually have a slightly higher rate.

What to look for in property investment loans:

Price

Keep in mind that interest rates are typically slightly higher.

Fees

There is usually a once-off establishment fee that is charged.

Lender’s mortgage insurance

The lender will charge an insurance premium that will cover the cost of the loan in the event that the borrower can no longer pay.

Settlement fee

This a fee that is charged once the loan is settled.

Early termination fee

If you pay the loan off before the end of your loan term, you may be charged an early termination fee.

Features to look for:

Ability to make additional repayments

The best property investment loans give borrowers the option of being able to make additional payments towards the loan.

Split loan option

Transactional facility

Security and guarantee requirements

Benefits of getting property investment loans:

  • Investment in commercial property offers higher returns compared to residential property.
  • Commercial properties are much easier to evaluate than other types of properties. It’s simpler to estimate the income-generating potential of the building by requesting an income statement from the current owner.