The most expensive saving that property buyers ever make is avoiding the cost of obtaining independent advice when they arranged the finance for their property purchase.
No matter how informed you are or how good a loan might seem, discuss the loan structure & your options with a property lawyer before committing to the loan.
Tip 04 – Keep Loans Separate
- You should avoid or minimise using the same Lender to finance the purchase of multiple properties – we recommend different lenders for different properties.
- Avoid giving a bank a mortgage over more than one property to secure one loan.
Consider this example:
- You have a small mortgage over your home with the ABC Bank and you wish to use the equity to finance an investment purchase.
- Arrange an investment loan over your home with the ABC Bank. Keep the amount borrowed below the maximum LVR to avoid mortgage insurance.
- This investment loan on your home will be used as a part payment for the purchase price of the investment property.
- Arrange an investment loan and mortgage from the XYZ Bank to purchase the Investment property.
- Whilst this process requires more work for you, it is absolutely critical as the properties and the loans remain separate. The failure to adhere to this process has destroyed many people’s finances.