We currently owe 167902.02 on a unit bought for 180000 early 2006. The neighbours unit was recently sold for 200000, and we figure our would be worth the same. At what stage could we refinance to and redraw some equity to use as depost for another property. Another issue is that its an ING fixed interest loan, if refinancing to another ING product are they likely to waive break fees?
Hi voigtstr,
You can use the existing equity in two different ways to buy another property.
The conventional way is to refinance the existing fixed rate loan to the maximum LVR ING or another lender will go to. Some lenders will allow you to borrow 100% in certain circumstances. ING being on the conservative side of lending may only let you go to 90%? – you'll have to ask them about this and the attitude to break fees if you do another deal with them. The net additional amount raised can then be used as a deposit after taking into a/c start up fees.
Another way to go is give ING or another lender a second mortgage over the existing unit together with a first mortgage on the new one. If ING accepts this proposal, then you won't have to payout your current fixed rate loan.
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