hi guys
i have a question about accessing the equity i will have when my house is built
iv worked it out to be around $40,000
house valued and around $300,000 and having a $230,000 loan
only being able to use up to 90% of the value of the house, that works out to be about $40,000 euity correct?
now, im not sure that i will want to access it, as i want to see what interest rates do, and if i move people into my house making things easier etc. but id like to explore the option
my brother has lost his license, so i am thinking of selling my car now, using his car for 6 months, using the money from my car towards the house, furniture, driveway, fencing, garden etc.
then using equity, not much, around 10-15 grand to buy a new car when it is time to give my bothers car back to himmy reasoning for this is my car needs upgrading anyway, i will get more money for my car now than in 6 – 9 months, i will save money on rego/insurance and being a v8 petrol. i will have more money for the house (which iv worked out i have enough anyway, but its nice to have more and be safe, as this is my first house and its scary)
is this easy enough to do once house is finished?
the equity just goes onto the existing loan so weekly repayments will be slightly higher?
how much higher per week would it be on current interest rates? not much i am guessing, as it is only around a 7% increase to the existing loan
is there a limit on when i can access equity again after that?
as i would like to buy another property as soon as possible once this house is completed.any advice, tips, warnings welcome
thanks in advance
Go to the bank and discuss setting up a line of credit loan.
By doing this you are getting a facility set up so when you need to borrow the extra equity you withdraw funds from the line of credit account and then the loan starts.
By doing this the bank will work out how much you can borrow based on the value of your property to a set LVR level and also your service ability if you can afford the repayments.
is there a limit on when i can access equity again after that?
Yes LVR and service ability.LVR = (Loan Already + LOC + Another Loan / Property Value ) x 100
LVR may be 80% for line of credit. You might be lucky to get 90% LVR
(Property value may increase but that takes time)Hi,
I have a question with regards to Equity. Trying to get my head around it!!!My husband and I have a positively geared investment property in Chuwar, QLD (rented out for $300 per week) – bought for $199K, owe $180K – now valued conservatively at $400K. We have just used the equity to purchase a 4 year old apartment in Carlton (MEL) for $260K (rented out for $240 per week) which is negatively geared.
Question, are we able to 're-use' the Equity from the Carlton property to purchase another one? We live in a DHA home in ADL and would like to purchase a PPOR here – to sell in 2012.
Nic
Hi Nic
Yes you can certainly do so.
Sounds to me though like the loans have been cross collateralised and not a great way to keep going forward.
If you are going to look to keep moving then i would look to uncross the loans first.
Richard Taylor | Australia's leading private lender
Thanks for your reply Richard.
We are looking at the ANZ Breakfree package. The Chuwar property was our PPOR until 2003 – so that is a principle and interest loan (offset account). The Carlton property will be interest only. Should we have gone to a separate bank for the loan for the Carlton property? I have only just sent the paperwork….I can always withdraw it!!!
I guess I don't understand how another lender would be willing to give you a loan if your original loan is not with them ie. how would the other lender use the equity – or rather, have access to it?
Nic
Nic
Nothing wrong with the Anz Breakfree package but the loan needs to be structured correctly.
I personally would not have the Chuware property on P & I even if was your old PPOR as interest only with offset is the way to go unless you have another PPOR loan.
Do not take out 110% of the new purchase price on the new property offering then security of Carlton.
You need to keep things separate and the Bank will have NO Idea how to structure it.
Personally I would use a mix of a Line of Credit and Interest only loans with an offset account and definately not unless you have no choice cross collateralise the securities. The Bank will encourage you to do this but it certainly isnt in your best interest.
Richard Taylor | Australia's leading private lender
Thanks for your advice Richard. I am a bit miffed at the broker we have gone through!
I am probably asking a lot, but could you please send me a RP Report on Chuwar QLD?
Hi Nic
The reports are individual property based so email me an address and I can send you back a report.
Doesnt like the broker you are using has any idea on how to structure an investment loan.
Richard Taylor | Australia's leading private lender
JD86 wrote:hi guysi have a question about accessing the equity i will have when my house is built
iv worked it out to be around $40,000
house valued and around $300,000 and having a $230,000 loan
only being able to use up to 90% of the value of the house, that works out to be about $40,000 euity correct?
now, im not sure that i will want to access it, as i want to see what interest rates do, and if i move people into my house making things easier etc. but id like to explore the option
my brother has lost his license, so i am thinking of selling my car now, using his car for 6 months, using the money from my car towards the house, furniture, driveway, fencing, garden etc.
then using equity, not much, around 10-15 grand to buy a new car when it is time to give my bothers car back to himmy reasoning for this is my car needs upgrading anyway, i will get more money for my car now than in 6 – 9 months, i will save money on rego/insurance and being a v8 petrol. i will have more money for the house (which iv worked out i have enough anyway, but its nice to have more and be safe, as this is my first house and its scary)
is this easy enough to do once house is finished?
the equity just goes onto the existing loan so weekly repayments will be slightly higher?
how much higher per week would it be on current interest rates? not much i am guessing, as it is only around a 7% increase to the existing loan
is there a limit on when i can access equity again after that?
as i would like to buy another property as soon as possible once this house is completed.any advice, tips, warnings welcome
thanks in advance
I like the idea of selling car and making some unpaid loans being paid. If you can save a good money in these 6 to 9 month you can easily get rid of this crisis.
im not in debt for my car, just thinking it would free up some money for 6 months as i now have another car i can use
i am leaning to wards not doing this now, keeping my current car and spending a little on it to get it in better condition
then purchasing my next property asap
thanks
Hello, I also have a question I currently own an investment property in Port Hedland WA, which was valued 8 months ago at $480,000 and now has $308,000 owing, the property is rented at $1200 per week, my partner and I are seriously thinking about using as much equity in my property to purchase our own home in Mandurah WA. The loan on the investment property is Rocket Repay with Westpac but am considering looking at other loans that may work better for me and my partners circumstances and changing the loan to interest only (unsure if a good idea???), how much equity could we use in the investment property and is it worth while almost maxing that property out to go towards purchasing another property to live in???
Also I am struggling to locate a really good financial advisor in the Mandurah area does anyone know of any, it would be much appreciated.Thanks Mel and Rob
First investment property now keen to purchase property to live in (dont really like renting)
Hi Mel and Rob
Firstly welcome to the forum and i hope you enjoy your time with us.
Normally you would be able to refinance and raise equity upto a maximum of 90% of the property valuation however in saying that i have had the odd issue with mortgage insurance and the Port Hedland post code in the past.
Assuming we can get around these issues you would be able to raise an amount of 90% of the existing valuation less the $308,000 existing debt and use this as deposit for other IP's.
Personally I would always recommend to a client that you look at an interest only loan with 100% offset account especially where you have no other non deductible debt. Then sitting in behind the interest only loan we link a investment line of credit.
The new IP loan should again be standalone.
Simple structures dont have to be difficult to set up but you do need a broker who understands the mechanics.
Hope this helps.
Richard Taylor | Australia's leading private lender
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