What to know when applying for a loan to invest in property
How easy is it to get an investment loan? Here’s a guide to some of the things lenders look for.
If you are thinking about applying for an investment loan it can pay to be prepared and have a solid understanding of what lenders are looking for. This can potentially help you improve your chances of securing a loan.
Here are some of the things lenders may consider when assessing your loan application.
The rental income
When considering your application for an investment loan lenders do consider any rental income you will receive, however, it might not go as far as you may think.
For permanent rentals lenders generally scale the rent back to 70% to 80% of the actual rent received for a suburban house and 60% for a high rise property. This reduction is to allow for potential rental vacancies.
For non-permanent rentals, such as holiday letting and Airbnb, lenders usually look at the rental history – and they might go as far back as the past two years.