Choosing A Repayment Strategy

Choosing The Right Repayment Strategy For Your Circumstances

If you are buying an investment property you repayment strategy may make a difference on how much money you pay to service the investment while you are waiting for a capital gain to occur.  Each has its benefits and its drawbacks.

Choose an option that best fits in with your investment strategy.  This is crucial and we at APD Lending Services can make sure we find the right loan facility for you.

One option is to choose an interest only mortgage.  An interest only home loan is designed to give you lower payments.  Your payments are lower as they only cover the interest on your loan and not the principal.  Interest only repayments are good if you want save money while you hold your investment.  The main drawback is that if you want to sell your property in the short term, any dip in property prices can affect your ability to pay the principal that is due on sale.

The other major choice is a Principal and Interest mortgage. A principal and interest home loan means your payment pays the interest while reducing your principal all the time.  This may be more expensive over the short term, but increasing your equity in the property can be rewarding when you sell your investment.

If you want to pay off your home loan as soon as possible and own your investment property outright, this is an appropriate option for you.

Getting an investment property is a big step but financing can be easy.  Tony at APD Lending Services will help you get the best investment property home loan for your circumstances. Click here to see the minimum lending criteria for investment property mortgages.