All Topics / Help Needed! / Advice for a newbie
Hi there,
Just a newbie to the investing journey and am after some advice on our situation, have posted once before but situation is a little different now.
Currently have a house that has been valued at $300,000, current mortgage is $240,000. Family has grown and we are looking at a new home and would love to keep our house as an investment property but have no real savings for a deposit for the new house. Is it possible to use the equity in our house to pay the deposit for the new house or should we perhaps rent out our current PPOR and save for the deposit in due course??
Also, is an option to stay in the house and convert our loan to a interest only and save for a deposit that way??
Sorry if it seems basic but I'm new to the caper.
Any advice would be greatly appreciated.
Cheers,
Matts
Hi Matts
Might be a little tricky to use the equity because the lenders will tend to do only 80% lend on refinance.
Yes you can, lenders will lend up to 95% of both properties,
The problem you will have will be tax effectiveness. You will be borrowing 105% for the new one and paying LMI but neither the interest nor the LMI will be deductible.
Terryw | 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
You can refinance your property at 95% with most lenders and most likely go to 90% with your current lender.
Based on the a property amount of $300,000 – even though there is LMI payable I would be comfortable with going to 95%.
The big variable will be the valuation so I would consider ordering several upfront vals. Most lenders offer this, its free and if you proceed with the loan you can use that valuation.
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
I must have missed the memo. Since when and who are you allowed to refinance with up to 95% LVR?
Only 95% refinances I know are dollar for dollar moves. Anything involving debt consolidation and/or equity release is max. 90% from what I know.
Cheers
Tom
Plenty of lenders – just did one today with Westpac on a vacant land at 95%.
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
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