Purchasing an Investment Property
Dominion Lending’s Sarah Colucci shares three tips to help you become a savvy real estate investor.
1. Have an adequate down payment
Since lenders have tightened up, down payments will need to be anywhere from 20 to 35 per cent. Lower down payments can mean higher interest rates and expensive terms. If hard cash is unavailable, a useful strategy is to access equity in your primary residence at a low and competitive interest rate. A qualified mortgage expert can help access equity with minimum risk and without causing huge financial costs.
2. Make sure your credit score is strong
Borrowers are usually surprised at how the simplest oversight can cause their score to plummet. Ensure your credit cards are at least 30 per cent below their limit. Also, don’t take out new credit or apply for credit cards or other forms of credit before getting a mortgage, as this can reduce your score. Old credit is a lot better than new credit.
3. Research the property you are buying
Before purchasing a rental property, ensure the numbers add up. Have an appraiser provide you with the property’s fair market value. Determine all costs of the property, including renovation, mortgage payments and maintenance, and make sure that you could carry the costs of the property in the absence of rental income.
For more info and free mortgage tips, visit www.sarahcolucci.ca
Facebook: Sarah Toni Colucci, Mortgage Agent