Can FHOG be used as equity towards an IP?

Hi I've just decided to buy my 1st PPOR before getting my first IP ( was previously planning to do the opposite). Just a few questions in regards to this........

1. Does equity in a PPOR hold the same weight as cash when applying for a new IP loan? For example, if I needed a 10% deposit to be approved for the IP and I dumped that cash deposit into my PPOR mortgage instead, would I still be able to get that IP loan using the equity now in the PPOR?

2. Can the FHOB be used as equity straight up? or is there a waiting period of some sort

Cheers,
Chris

Hi Chris

In answer:

1) Yes equity is certainly an acceptable form of deposit so would not prohibit you from purchasing an investment property.

2) Yes FHOG can be used for any purpose. If you want to pay it straight off your loan then nothing to stop you doing so.

Issue maybe that most lenders now only go to a maximum of 90% lvr so will need a little more equity than normally expected.

Obviously easier to use a lender that does a 95% lvr especially when it comes to buying the IP.

Richard Taylor - richard@tayloredfinancialsolutions.com.au Tel: 07 3720 1888
Residential Mortgage Broker providing structured home loan advice for investors and owner occupiers all over Australia.
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