Hi guys,
I’m looking to buy my first investment property and want to reconsider my options again with loans / strategy. I have $100K savings and earn circa $120K. Currently I have a pre-approval for a BankWest variable loan with 95% LVR, but after some thought, I’m thinking maybe a 5 years fixed loan might be more suited to my risk profile as I know how much my repayments will be for the next 5 years.
So I’m getting a little confused and wondering what are some of the pros and cons of each type of loan, and which type of investor are they suited to?
My goal is to buy and hold long term and I want to build up a small portfolio over the next few years, starting with something small around $300K-$400K.
Having a variable loan will give you the option of changing banks in the future if BW say they don’t want to give you loan for investment property. The benefit is it will keep you more flexible.
By the way, I would beware of pre-approval from Bankwest. They wont actually assess your finances (income, expenses, assets, liabilities & credit file) till you go for full approval. In my experience their pre-approval don’t count for much.
Bank West pre-approvals are worth zippo but more importantly at a 95% lvr you wont be refinancing so i think i would ignore willbells comments about changing Banks in the future.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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