Can i use my existing equity?

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

fullout
Member
@fullout
Join Date: 2003
Post Count: 233
July 2, 2003 - 3:26 am
my first IP just settled yesterday.
I paid 16,000 (20%) into that deal.
Now can i go out and start buying more properties using my 20% equity in my 1st prop? I dont have much cash savings left…
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
July 2, 2003 - 5:57 am
Mate you are keen. It may be a bit too soon. Do you think the property is worth much more now?
You could do it by going for high lvrs and paying mortgage insurance. It would also depend on your income etc.
Terryw
[email protected]
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
The DIY Dog Wash
Member
@the-diy-dog-wash
Join Date: 2003
Post Count: 696
July 2, 2003 - 1:13 pm
Hi Fullout
Generally banks work out equity like this
80%xProperty value (16000) = 12800
Less mortgage value (12800) = 0
Unless you can prove the property has significantly increased in value you haven’t got spare equity yet.
Good luck
Cheers
Leigh K
Read, learn, grow but most of all just do it.
Xenia
Member
@xenia
Join Date: 2002
Post Count: 1,231
July 3, 2003 - 1:45 am
hi fullout, congratulations on your first property and on getting the investing bug. my god it is a GREAT feeling isnt it [] people often say how scared they are, i find that i have been over the moon with excitement with every deal i make.
dont worry about the numbers, thats what bank managers and mortgage brockers are for [^] if the new purchase is rented already, that will add to your income, go back to your financiers and see what you can get, you cant loose anything by trying. although, i might get scolded for saying this here, i do nothing down deals using existing eqity all the time []
good luck
xenia
The DIY Dog Wash
Member
@the-diy-dog-wash
Join Date: 2003
Post Count: 696
July 3, 2003 - 2:40 am
Xenia & Fullout
There is generally nothing wrong with nothing down deals using your equity but Fullout doesnt have any equity in this property yet so the bank wont use it to fund another property
Cheers
Leigh K[]
Read, learn, grow but most of all just do it.
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
July 3, 2003 - 3:21 am
Hi Fullout
You do have some equity. You could go to 95% of the value of both properties if your serviceability would allow it, and you are willing to pay LMI.
Terryw
[email protected]
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