Hi People
My situation is:
With my family trust company I have purchased first investment unit at very good price, 80% loan ration, but considering the resale value of the surrounding units (this one was a deceased estate sold by administrator) the LVR should be 70%
I would like to buy the next property, how can I use the equity?
Which bank, so to speak
thanks
Hi Rick
Without knowing too much of your details – I'd start with your current lender.
See if they carry out upfront valuations so you know how much your property is worth before submitting an application.
Ask them about the max LVRs they allow for equity releases.
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]
Most lenders offer upfront valuations so check with your banker or broker.
You need to sit down and give some thought on how much equity you going to draw from your existing property.
Also make sure that the loans are structured and set up correctly for each of the properties.
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
thanks there
I know most harp on about how bad cross col is, but how do you lend against another property's equity without cross collateralization?
Set them up as separate individual standalone facilities. For example, PPOR value is $500,000 and current loan is $280,000 against the PPOR. You want to use $120k equity to purchase your IP worth $500,000 plus $20k in costs as well. You will take out a loan against the IP for $400k. The balance will come from the equity of $120k.
Therefore you will have 3 loan accounts. Loan Account "A" in the amount of $280k against the PPOR – purpose of loan is PPOR. Second Loan Account "B" in the amount of $120k also against the PPOR – purpose of loan is IP. Then the third Loan Account "C" in the amount of $400k held against the IP you are purchasing – purpose of the loan is IP.
Note numbers are round figures but hopefully should paint the picture for you.
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Hi Rick
Sometimes the best way is to get another bank to pay out the loan with your current bank and start again with an Equity Release Loan. The "security" for the loan would be your current property (and ONLY your current property), but a big pile of money is provided to you in an "offset account" which you can use to fund deposit and stamp duty on an IP. You then get yet another loan (with potentially another bank) to fund the remaining 80% of the IP with a regular residential investment loan.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Rick who is the current loan with and was it done thru a Broker direct.
If you give us some more info we can advise you of the particulars lenders 'cash out' and valuation policy.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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