Forum Replies Created
Hi ,
well & good but the actual amount of " top up / line of equity "you will be allowed to get from your bank will depend on your Income and serviceability of the amount of loan at either 80% or 90 % of total Value
( but at 90% you will be up for mtg insurance + fees and charges etc )Simple formula you could use based on the information supplied and lets asume the Banks Valuation of your home is pretty much in line with current market values @ $580k
( EXAMPLE ONLY )
Current value of you home – $580,000 – Less 20 % ( or 80% of valuation )
= $464,000
Existing mtg owing – $345,000
Amount of Equity Available = $101,000 ( Figure would be slightly higher @ 90% of valuation + mtg Insurance)
The bank will only loan this amount of equity to you if you can afford the extra repayments on it
Actual anount the bank will loan in equity will be based on your current income and other monthly expenditure like car loans, living expences, school fees, child maintence, credit card bills , insurances , council rates etc etc .
Cheers
EyekewHi ,
I am a small player in Investment properties but have a number of them over the past 8 years .I bank with ANZ and currently on a breakfree package -which allows me to apply for up to 5 loans with no application or establishment fees with yearly fee of $320 and discounted interest rates as the value of borrowings grow – which suits me fine .
I did finance 2+ units on the one title with them and the Min deposit with ANZ at the time was 20% down – regardless of the number of units using 20% deposit from available equity in my other assets and there was sufficent rental income and personal income to service the loan .
Not all banks require this as a Min deposit but there are other factors to be aware of and that is the mtg. insurance you will have to pay upfront if deposit is less than 20 %.
Good Luck with the Offer on the Units – hope it all works out for you .
Cheers,
EyekewHi Twinkle
this Quick formula may help to work out your Equity –
If you want to Hold onto the Property as security – you can access the ' Equity ' in the properety ( if there is any )
if you sell your property then the diferance is " profit" or ' capital gain "
in your case to work out your Equity – ( As a Guide only )
Purchase price / Build price $300,00.00
Your deposit (10%) $30,000.00Bank Loan (90%) $270,000
Market Value of your Property today is $350,00.00 – less 20% of Market value (Banks Intrest in the property )
= $280,000 less what you Owe / loan amount $270,000.00 = $10,000 Equity in the property
and effectivly " Nil Equity " from a banks prespective
But if you Sell at today's market value – you will make a Capital Gain / Profit of $80,000.00 .
Hope this explains it a bit better for you .
Cheers
KenHi Steve ,
appreciate your comments and advice – you have explained it very well – we had investment rental properties in the past but this was a ' new one ' for us on our vacant block .
We may consider the option, on examination of their 'Offer to Purchase' and the terms & conditions of that offer before we turn down the opportunity to sell to them , as we are not in any hurry to sell the block and the development venture may just be right for us .
Cheers ,
Ken
