Hi there!
I’m a novice in this IP game.
Need few questions answered b4 I can get into this-
1)this expression – “have the property revalued, and then look at redraw or refinance to gain access to equity”…So the question is how does refinancing gain access to equity, or even redraw? any examples given will be much appreciated2)In my case I have a family home, with a remaining mortgage of approx $80K , and the house (guess estimate) value is $400K. Redraw funds available $82K. So where do I go from here to begin my IP direction. Hoping to look at buying 1-3 IPs soon.
3) So should I try to refinance to another bank, or redraw (and hope the rental covers both IP and home repayments?)?
Ciao
Morning,
1)this expression – “have the property revalued, and then look at redraw or refinance to gain access to equity”…So the question is how does refinancing gain access to equity, or even redraw? any examples given will be much appreciatedThe way refinancing gives you access to equity is by taking a new loan against the property at a higher LVR (loan to value ratio) – So using your example of owning a property valued @ $400k (with a current mortgage of $80k) your current equity is $320K. If you refinance the property and take a 50% Loan this will give you access to an additional $120k of funds – $200k (50% of value) less the $80k you currently owe.
This is also refered to redrawing as you are redrawing anohter $120K out of the propertties value.So what you could do is take this additional $120k and use it for down payments on IP’s.
Be careful that you do not leverage yourself too much and get in a position where you can’t make the loan repayments. But you are exactly right saying “the rental covers both IP and home repayments?“
Best of Luck
Pete
…Beware of the dreamtakers…
BTW – I was part of the MAP Program and am more than happy to answer and questions/comments you may have – Happy Investing…
Much appreciated for yr advice Pete!
By the way, have you or anyone heard about that if you rolled a CGT gain from an IP (let’s say) onto a bigger $$ investment, the gain is CGT exempt?
Regards..
By the way, another question, re yr example, better to refiance of $120K or use the available redraw fund of $80K for an IP.
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