When looking at buying real estate, many people spend a lot of time looking at properties available on the market first and then think about whether they will get finance approval later.  We always advise to do the opposite.  If you are thinking about buying your first investment property or expanding your property portfolio, we recommend that you start by examining your own financial position and then obtain a preapproval from a bank so that you have a clear picture of what amount of money you have available to invest into the purchase of an investment property. 

Also, just because a bank is willing to lend you a particular amount of money doesn't mean it is a good idea to borrow the full amount.  We recommend that you ensure that you have contingency plans in place so that if something unexpected happens, you will still be able to comfortably meet the regular repayments. 

Starting your property search with a clear picture of your borrowing capacity will help you avoid being unable to settle the purchase of a property due to finance not being approved.  If you are trying to buy a property at auction normally there is no finance clause so if you are unable to settle the purchase then there can be significant financial penalties which you will then have to pay. 

This also reduces the chance that you will be trying to purchase a property which you can't really afford.

Additionally, we also recommend that you ensure that you have a sufficient deposit so you avoid having to pay mortgage insurance.  Mortgage insurance is a cost to some property purchasers however it doesn't provide the buyer with any benefits.  Ultimately it provides protection for the bank funding the purchase. So as this insurance does not provide you as the buyer with any real value we recommend that it is certainly a cost to be avoided if possible.