All Topics / Help Needed! / Help understanding equity – vs Loan borrowing amount

Viewing 6 posts - 1 through 6 (of 6 total)
  • Profile photo of darkness72darkness72
    Participant
    @darkness72
    Join Date: 2013
    Post Count: 51
    November 26, 2014 - 9:31 pm

    Hi

    A silly Q,

    Example – have equity of 200k

    Look to purchase new investment property of 600k total.

    Does that mean my Total new loan from bank will only be 400k or 600k

    ie: the 200k equity is the safety net ….

    And I will only have to make fortnightly repayments based on 400k … yes??

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    November 26, 2014 - 10:40 pm

    Hi Darkness

    Not a silly question at all.

    If you are buying for 600K then your new loan will be for 600K and interest repayments will be based on this figure.

    Remember there is a big difference between equity and borrowable equity.

    The other thing is if you are looking at buying another property probably a good idea to get the equity loan set in place now in readiness as you would probably look to use a separate lender for the standalone loan.

    Structure the loans correctly and you will be fine.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of darkness72darkness72
    Participant
    @darkness72
    Join Date: 2013
    Post Count: 51
    November 27, 2014 - 4:13 pm

    Thanks for your response

    looks like I will have to do a little more research

    I was thinking the same as you but my loans broker explained it as above in my first post, and a work colleague believes their equity / investment loan works the same…….?

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    November 27, 2014 - 10:48 pm

    Time to be switching brokers and ignoring comments from work colleagues.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    November 29, 2014 - 12:03 am

    How could it be otherwise?

    If you are buying a $600k property you have to pay $600k!

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    November 29, 2014 - 7:50 am

    Hi Darkness

    Spend some more time educating yourself and getting clued up. I wouldn’t rush into anything right now until you’ve got a better understanding of what you’re aiming to do.

    It sounds like your current broker isn’t working out too – perhaps consider getting a second opinion.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

Viewing 6 posts - 1 through 6 (of 6 total)

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