All Topics / Help Needed! / TRYING TO USE EQUITY – OR GET A NEW LOAN

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  • Profile photo of dangermouse99dangermouse99
    Participant
    @dangermouse99
    Join Date: 2004
    Post Count: 88

    Hello All, can sumone please help.
    Im fairly new to investing, I currently have a
    -ng property, great location etc so its worth it.
    Im locked into a honey moon period of 5.95 till April 05, i have a $400K unit I owe $288K so have about 110K equity a mortage broker will give me around 300k loan, should i take up the offer, or is it better only to use my equity from my loan and wait till April 05 or get out for a fee of around $4000, not sure of the what the best wat to go is. I aalso will have around 50K in cash, dont know what to do with it as sum say to use it as a 20% deposit and sum say dont use it at all, appreciate any thoughts!!!

    Profile photo of Mobile MortgageMobile Mortgage
    Member
    @mobile-mortgage
    Join Date: 2003
    Post Count: 913

    Hi Dangermouse,
    I have replied to your PM,

    Regards
    Steven
    Mortgage Broker

    [email protected]
    http://www.mobilemortgagemarket.com.au
    Ph:1800 820 500
    VICTORIA

    PLEASE note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.

    Profile photo of DerekDerek
    Member
    @derek
    Join Date: 2004
    Post Count: 3,544

    Hi Dangermouse,

    While you have equity of $110K you need to be aware that only 80% (higher if you pay LMI) of the total value of the property (less existing debt) is recognisable security. As such you really have $32K available as deposits (@80%) or $72K if you go to 90%.

    For me I would be reluctant to incur break costs unless I knew I was going to recoup that, and some, in a fairly quick time. Given there are only 6 months to wait I would be tempted to wait for time to elapse and spend the time researching your preferred investment area.

    I also prefer to use equity for subsequent deposits and would put the $50k either in an offset account or redraw on your existing property (if able) – this would reduce your monthly interest bill and aid your cashflow situation while still enabling you to have some emergency cash in case of need.

    Derek
    [email protected]

    Property Investment Support Available. Ongoing and never stopping. PM welcome.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Do you have a PPOR with a loan? If so the cash may be better used by putting it ina 100% offset account attached to this loan.

    If you are currently on a honeymoon rate, why not just stay at the same bank and access the equity that way? Either corss securitising or getting an additional LOC on the same property. If you got the LOC, you could even go to another bank for your next loan.

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

Viewing 4 posts - 1 through 4 (of 4 total)

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