Hi
My fiancee and I have one investment property in Adelaide, in Salisbury East. In the time that it has been bought 2 years ago, it has increased in value by 20%. As well as some of the loan has been paid off by renting it out giving us equity. We really want to expand our IP’s but only have the equity at the moment as we are currently building a house north of Adelaide. Can we use the equity to buy properties which we rent out and still receive a positive cashflow or is it impossible.
Do you need the cash to put down as deposits to make it all work or can it be done by just equity.
Please if anyone can help me on this matter I would appreciate it
Ben
PS I wish I was one of the lucky 10 chosen!
You can use your equity as a deposit. The Bank will evatuate how much equity you actually have and allow you to borrow against it. You need to speak to your banker/broker to get an idea of how much they will lend.We can’t tell you how much, only that you should be able.
MJK
Hi Ben,
You can use the equity in any way you want. From you information you are looking to borrow against the extra 20%+ that you now have.
Generally you borrow up to 80% LVR of the property you have and the new property you want to buy.
So for example your old proptery is worth 100K you can get a loan (with lenders moragate insurance) of 80K. So the differencce between this amount and loan you have is the equity you could us for a deposit on a new place so that you only have 80% LVR on both the old and the new one.
Chris
Chris
If you borrow 80K and have 20% equity in your other property,how do you pay the initial 1o% deposit.
Can the lender give you a deposit bond or how does it work.
Are they in effect loaning you the full 100K
As you can see I’m very inexperienced and have lots still to learn.I try to spend 1-2 hrs nightly reading the forum if and when I can get on the computer as my daughter also uses it for Tafe work
Thanks for any help you can shareChris
If you borrow 80K and have 20% equity in your other property,how do you pay the initial 1o% deposit.
Can the lender give you a deposit bond or how does it work.
Are they in effect loaning you the full 100K
As you can see I’m very inexperienced and have lots still to learn.I try to spend 1-2 hrs nightly reading the forum if and when I can get on the computer as my daughter also uses it for Tafe work
Thanks for any help you can share
The topic ‘Help, is equity good to use’ is closed to new replies.
