Hi
I was wondering if anyone could explain to me a bit more about equity?
I have an investment property and i live in a rental flat. The rent I receive for the property covers my mortgage and property management costs each week. The mortgage is now $168,000 ($10,000 of this is available in a re-draw) with the value of the property conservatively around the $290,000 mark
I am wanting to, in the near future, purchase another property but don’t want to tap into my shares, (over $55,000) but was wondering if they could be used as a sort of collateral against another loan? Another factor is that I am self-employed. I received the first mortgage on a low doc loan.
Anyway if anyone could give me an idea on what equity is all about and the pros and cons of using it, that would be great.
Thanks heaps…Hi LC
Yes to both questions.
Dependant on the stock you are holding in your share portfolio you would be able to margin loan to a level of between 70-80% although the rate maybe slightly higher than a good lodoc loan secured against your IP.
Be careful not to use the redraw facility on your current loan but try and establish a separate LOC or IP loan from which you can draw down the deposit and acquisition costs for the 2nd IP.
Then take out a new loan (you could go to 95% lodoc but wouldnt suggest that due to the interest rate) so circa 80-85% will see you alright.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
New Shared Equity scheme has arrived – Email us for details.Richard Taylor | Australia's leading private lender
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