Hello
I have a apartment which is now worth 320K with a mortgage of 190K to pay. I would like to remortgage to buy a bigger place to the value of 400K.
I am confused with using the equity?
For instance, equity in apartment would be 130K.
Questions
1. Can you use this 130K for a deposit or is it 80% of the equity $104K that is used a deposit?So if I am wanting to buy a house for 400K plus my flat 190 = 590K
Does it mean that the total figure to refinance would be 590K or is it 590K less the deposit meaning would i only have to borrow 486K?
Also i would like opinions on whether i should renovate my bathroom in apartment? It will be a rental property in the next 6months. Do you think it is worth it? can you renovate whilst living there and use as tax deduction as it iwll be used as investment property?
Help please for first time investor
Think of equity as a security against the loan, your equity is your share of the apartment so, You get a new loan secured against your share of the apartment for 100% finance of your new property.
So yes if you buy the new property you will have 2 loans 190k+400k = 590k totalThe 80% is of the value of the property, not of the equity value or loan amount. If you have your current appartment plus the new place, this is a total value of $720k.
80% of this value is $576k. Considering your current loan is $190k you wil need an additonal $14k (plus purchase expenses) to maintain it at the 80% LVR.
If you go ahead and buy the place for $400k and have no additional funds your LVR will be 81.9%. You will be up for some mortgage insurance, but it wont be a substantional amount and you will be able to borrow additonal funds to cover the insurance
H HI,
What's the motivations behind renovating the bathroom in the apartment?Thanks.
Be careful when renovating the bathroom as it can be the most expensive renovation if plumbing work is required.
If you are just thinking of painting the room, tiling a wall or floor and resealing a bath rather than replacing it then it is a good idea
Make sure you only do what is required to make the bathroom look reasonable to a tenant rather than doing an expensive renovation.
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