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The real estate market in Canada continues to grow at an exponential rate. Some savvy Canadians are considering purchasing investment properties, and many other already have. However, property is a big investment, and securing the finances to make this jump can seem daunting. We’re here to help! If you’re interested in investment properties, get financing tips from the leading property management company in Toronto by reading our blog below!
While the minimum required down payment is typically 5%, we would greatly advise against only putting this much towards an investment property payment. The higher downpayment, the higher the savings in terms of interest rate. Your mortgage length will go down, and you’ll keep more dollars in your pocket at the end of the day.
There are many factors that go into deciding the details of your loan on your investment property. First things first, always get an up-to-date credit check and report done prior to considering going to your bank. See what is going to work with you and, more importantly, what is going to work against you when negotiating the details of your investment.
A general rule of thumb for property investors is if your score is below 740, you might see some increases in your interest rate or unexpected fees.
If you want to maximize your profits with a property that will rise in price quickly, you may want to consider some of these options. Securing a down payment through home equity lines of credit is a very viable option for some. You can also use this line of credit to finance the renovation of the property you purchase.
If you truly believe that the property you have your eyes on will grow into a hefty profit, sometimes it is worth it to go through riskier loan routes if all else fails. Of course, because these routes are more risky, we encourage potential investors to do extensive research and thinking before making this jump.