Getting a Home Loan in Australia if you're living overs...
29 Nov 2023
One lender for two home loans? Sounds interesting, and it’s entirely possible, and there are quite a few benefits in doing so.
If you’ve bought a place to live in, and you’re looking for another, you probably need to get another home loan. Whether that home loan is for an investment property or a vacation home, getting two home loans through the one lender can have some benefits, including:
As you might have guessed, having your next home loan in the same spot as your current home loan is convenient. On a day-to-day level, this could mean changing your personal details in one fell swoop, without having to inform two lenders, and be able to manage two home loans in the one user portal.
By the time you’ve secured one home loan through a lender, they likely already have a good snapshot of who you are, and your financial situation. By applying for a second home loan through the same lender, everything is likely laid out in front of them, potentially shortening the settlement process quite dramatically.
While this is true for a variety of scenarios, you could use your current home’s equity as a deposit for the next home loan, and potentially lower any interest payable. By doing this through the same lender, you’re potentially saving time on having to do another home valuation and equity assessment, as the lender already knows where you’re at.
Applying for a second home loan is a good opportunity to review your interest rates without having to refinance externally through another lender, and begin the whole application process again. Home loan applications can take a bit of time to get everything in order - this is why it could be a good idea to find a lender that already knows you.
The biggest consideration you’ll have to make when taking out another home loan is if you can afford it. Chances are if you’re reading this article, you’re probably already in a good financial position and are considering a second property to use as an investment. A lender will likely assess these things:
Cash flow: You’ll want to make sure you have enough money to service two mortgages, while being able to do other trivial things… like eating and paying for electricity. Lenders also apply a ‘stress test’ to see if you can afford repayments if interest rates rise.
Rental income: If your second home loan is for an investment property, a lender will likely want to see a rental estimate letter from your real estate agent.
Current home as security: If you’re using your current home as security for the second loan, you could put yourself at risk of losing both if you can’t meet the repayments. This is why it’s important to have good cash flow and have a safety buffer, such as high equity, in case things do go pear shaped.
If you’re ready to finance your next property, speak with one of our lending specialists today to get pre-approved for a home loan so you can begin your property hunt.
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