Currently have a property on IO loan for 106k being rented for 205 wk. I also have 2nd loan for same house for 72k(not IO). How do i access my equity ?
If I invest in another property do I make it IO as well ? Just read both books and am willing to make some sacrifices to create more wealth just need a helping hand to get going. Please steer me in right direction.T access your equity, you eithr take a loan out on another property for the full value (and costs if need be) and the new porperty as well as the one you currently have are listed as the security, therefore using the equity you have in the current home to cover this home.
Of you could take out a credit line on this home for the deposit and fees on the new home, however, this means two lots of loan costs etc. The first option above is probably the easiest.
Should you take aout an IO loan. that really depends on your situation. If you have a PPOR that you low eon then I’d take out an IO loan on theIP as all extra money should go on the PPOR first as you can’t claim any of the interest on that one.
I’m sure others on here will give you ideas as well.
Other than that, I’d suggest you talk to a broker about what you want to do and they can suggset what would probably work best.
Regards
PKHi Shane,
You should start by having a look at how your loans are structured and which lender you want to use. You would need both an accountant and a broker to do this. Then get your properties revalued by a valuer that is approved by the lender aqnd then apply to the lender to have the increased (hopefully) value taken into account when they asses your equity position.
Regards
Alistair“How do I access my equity?”
Sell your house and pay out the loans. Any money left over is yours to keep, and you will have “accessed your equity”.
‘Equity’ is not equivalent to money in the bank. It cannot be accessed & spent. It can be used as collateral to take on additional debt, but it does not actually pay for or reduce that debt unless you sell your original asset, and place the proceeds into your new loan.“House prices are a matter of opinion, whereas debt is real.” Merv King, BoE, 2004
You don’t say how much your house is worth, so we can’t tell if you actually have any equity.
Lets say it is worth $300,000. Generally (if you have enough income) 80% of the value is able to be borrowed.
80% x $300,000 = $240,000But you already have $178,000 in loans secured against this property, so your accessible equity is $240,000 – $178,000 = $62,000.
You can ‘access’ this by increasing your loan, or taking out another loan – a split.
This can then be used for deposit money, buying shares, gambling etc.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
Click below to email meTerryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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