equity in home but on a pension HELP please?

Hi there!
I think the responses given make a lot of sense.

You must remember that equity does not mean capital unless you sell, so when you can probably find a lender, you will end up with your own home debt plus an investment property debt.

Unless you can find positively geared properties, you will have purchased a liability and not an income producing asset.

To buy an income producing asset, you will have to minimise the debt. Some years ago you could have found properties cheap enough to service the debt and give you some income. With today’s prices such properties still exist, but are in more remote places that imply a higher risk. This risk can be assumed by someone with a larger portfolio of properties, or a high income that will offset any hiccups, i.e. tenants leaving, repairs etc.

So what is left, (if your choice of escaping the pension is property investment) is to borrow a smaller amount, the closer to 50% the better.
From what you say, it is only possible if you realise your equity by selling and buying a smaller flat for yourself.

This is easier said than done, and it implies a large amount of expenses, to sell and to buy.
Do your homework with diligence, write it all down, ask many questions.
Remember that RE agents are not your friends, even when they may like to be seen that way. You are on your own, and perhaps a mortgage broker will be more on your side than the agent or any bank manager.

There are some very good mortgage brokers on this web site that I am sure can crunch the numbers for you.

Regarding the impact of such actions on your and your husband’s pension, this are the (June) figures:

To still remain entitled to full pension you can have combined assets of $212,500
For part pension less than $473,000
This is adding all up, your home content, car, money in the bank and properties that are not your own home.
You could (I am not saying you do this, I say you could) sell your property and invest all the equity in properties that will give you hopefully some 6 to 8 % return, your threshold will subsequently increase to $320,500 since you will be considered “non-home owner” and you will probably but not necessarily qualify for rent assistance.

Having said all this, I will try to say something totally different and hope it may be of some help and not offend.

Contrary to popular wisdom, people who make it in business, and become independent financially, do not arrive at that position because they have “inside information”, and therefore, by asking for the right financial tips we will be able to emulate their achievements.

Our financial position is predetermined in our mind by our belief system. Each one of us has a financial blue print that predetermines how much we allow ourselves to earn a week.

It is such limiting believes that allow us to make it or to fail, and the familiar pattern of our actions we ourselves know all too well, repeats itself over and over.
One definition of madness could be, to do the same things we have always done yet expect a different outcome.

When I myself, learned of the existence of our subconscious mind and the role it plays in our success or the lack of it, I was surprised to find in my subconscious, values that others had planted there over the course of many years.

Perhaps the sentence I have repeated the most is the following fallacy: “Rich is evil poor is virtuous”. We get hammered this deadly concept in our mind from birth, from parents, teachers, priests, friends and work mates. The result is a belief that success in any field we may choose is for the “nerds”, the dishonest, the up-themselves, the snob, and a barrage of other derogatory adjectives we have incorporated as synonyms of rich and successful.

It is such negative programming, among many other factors that can determine that every effort we take to escape the rut is met with failure, a failure we secretly expect in order to demonstrate to ourselves and others, how honest and virtuous we really are as opposed to those evil rich people. (Remember Dallas?)

Now if you read this far, and I hope you did, I would suggest that before you even talk to an RE agent, you sit down and examine yourself, and prepare yourself for success. Just like you wouldn’t think of running a marathon without training including mental preparation, I suggest you get yourself into gear by first understanding how your mind work and why it is that you are in financial difficulties.
That’s right, I am convinced that because we bear the full responsibility of our current state, we also have the full power of turning it around.

When some people do get all worked up and offended by this words, particularly when there are health concerns, since we have been told for centuries that illness has to do with chance, genes, or bad luck but nothing to do with us, I hope that you can give this proposition a chance and use a cool mind. If all that happens to us is due to external factors, we are doomed. Nothing is under our control and we may as well not get up in the morning.
Yet…if I am right, that means you are in control and not fate. Isn’t that exciting?

So first things first, use other people’s experience to get ready for success. I will suggest some books, and hopefully others on this site will suggest other books. Remember that it is not about what to do with your home, sell buy rent, but how you can change your financial blue print, your mental picture of the income that suits you.

Search for the following free e-books
As a man thinketh, ( Jon Allan)
Think and grow rich ( Napoleon Hill)
Accept your abundance (Randy Gage)

I hope my post will be of some assistance in your journey towards success and financial freedom.

The vision that you glorify in your mind, the ideal that you enthrone in your heart, this you will build your life by, this you will become.
James Allen

May God prosper you always.[biggrin]
Marc

Whew Marc, Great post.

What about ‘The Richest Man in Babylon’?
I often think of the messages in this classic and especially the great walls that protected this ancient city. Also I think, the second chapter titled, ‘Set thy purse to fattening’

Purse