Hi.I have just listed our family home for sale, we have an outstanding mortgage of $50,000 and a valuation of $250,000. I want to set up a line of credit is it better to do this before I sell, or sell the property and pay off the mortgage first and then aquire another loan or line of credit for IP’s.[blink]
felix
Hi Felix,
The lender will require security for a LOC,
If you sell your PPR (security over the LOC) you will be required to pay down the balance of the LOC,
Or, if the loan is portable (and not all are) you may be able to transfer the security for the LOC across to another property. Cheers.Steven Crane
Interest Free Home Loan Agent
[email protected]
Phone: 0402 483 216PLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
In my experience a line of credit would probably end up costing you more than other forms of borrowing.
If you really want to sell your home and then I guess you could rent and end up with 200,000 less selling costs to invest with.
If you want to keep the home it may be better to re-finance with another lender and gain access to some of your equity.
A competent broker should be able to show how to do an asset lend with a re-draw facility or take it and put it in a high interest 5.5%-6% at draw account to help offset the payments till you need it.
Of course with any lender you would need to show or prove your ability to service the borrowings, and have a clear credit history.
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