Hi
I’m in the middle of reading Stev’s best seller and finding it very interesting. I am married with 2 children, i work pt and my husband is s/employed – annual income of $80K. I don’t know where to start with this property investing, we have $55000 in equity in our home and a minimal amount in savings – i mean very minimal. If we bought a house, would the deposit and fees come out of our equity or do we need to come up with the cash? I would really appreciate some help, sorry if these are dumb questions.Hi Vikki,
You can utilize the equity in your house to put a deposit down and pay the fees. There are a number of ways you can do this. In the past I have purchased properties using only $4000 as deposit and when I have finance approved I borrow the full amount plus the fees. The bank holds my house as security for the loan. As long as I have 20% equity when all the loans are added up and it is shown I can service the debt I have no problems getting the loan. Sometimes I have difficulty raising the deposit so generally I borrow off my inlaws, wait until it all settles and the $4000 is returned back to me and I pay back the inlaws. Now I use a Line Of Credit. This is where the bank will give you a certain amount of money in direct relation to your equity for you to do as you want. The amount you utilise is charged at an interest rate either the same as your home loan or a little higher depending on your bank. Remember the slogan “Equity Mate”. So you can use your line of credit as part of the deposit but remember as you use your line of credit your equity is reducing. There are I’m sure plenty of other ways but this is what I do. Good luck. Please be sure to do due diligence before you buy, too many people have been caught out by rushing in at the height of the boom. Good luck.[cap]Martin
Hi Vikki,
Yes you can use the equity available in your home to fund the deposit and associated costs,If you have a mortgage on your PPR it may be beneficial to set up a split loan, (split A PPR portion and split B investment portion) Use the funds from the split B portion of the loan for deposits & associated costs on 80/20 finance,
This structure will define deductible and non-deductible debt and help avoid cross colaterisation of the Two properties and the need for mortgage insurance.Regards
Steven
Mortgage Broker[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIAPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
Hi Vikki,
Mortgage Hunter knows what he is talking about as I said before there are many ways to do it[biggrin]Martin
Thanks Martin,
BTW I’m not Simon aka Mortgage Hunter, I’m Steven aka Mobile Mortgage, but that’s Ok it often happens,
Cheers
Steven & Simon
Mobile Mortgage Hunter
Mortgage Brokers[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIAPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
Thanks so much guys for taking the time out to answer my questions. Very much appreciated.[cap]
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