Hi All
One of my friends owns a property in inner sydney, he has held it for 10 years bought for $290 now worth around $750k – getting good rental return of $680 per week – so positively geared.
He rents a place near me but would like to buy in our area (south sydney). How can he access the equity in the property to buy another place? or can he buy another investment property with the equity? He does not have a lot of $$ in savings… his bank has indicated that he would have to sell to access the equity, surely this is not right?
any advice would be great!!
thanks!
You can take out a second mortgage on a property… so say for instance he was going to buy IP #2 through a bank called the ABC Bank, then ABC bank would take out a second mortgage on your friends first property (let's say of $200k) and another mortgage on the new property.
The finance chaps will be able to explain it in more detail, but that is the general idea.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
you can get normally get a line of credit using the equity. but if his bank said no, either they are just crap, or there might be some other issues. im sure a guru will answer soon though.
level3 wrote:his bank has indicated that he would have to sell to access the equity, surely this is not right? any advice would be great!! thanks!
Hi Level3Which bank is this? You can normally do a "top-up" to access some equity – some lenders will go to 90% of the properties value.
If this bank won't do it, he could always refinance to one that will.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
As long as you have no other loan or credit.I can see that the bank can give you loan on the equity.The question is how much would you borrow for the second property.and whether you will be able to service the loan .I would suggent that you should take to other banks and see what they say.
Mike.12
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