use of equity

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

burbonbill
Participant
@burbonbill
Join Date: 2003
Post Count: 16
January 16, 2004 - 2:37 pm
[8D][8D]we want to purchase an ip. we have 130000 k in equity can we use this and do the deal then in a few months sell the the property that we used as equity and buy more ip s. is this legal []
melbear
Member
@melbear
Join Date: 2003
Post Count: 2,429
January 16, 2004 - 2:58 pm
Hi burbonbill
Yep, it’s legal to sell the first place, however, you’ll find that the bank wants you to substitute the security, or pay some off the loan to bring the LVR back to 80% against your IP.
Or if you have set up an LOC against the place with equity, and used that for the deposit (therefore avoiding cross collateralising), the bank will require that the entire loan is paid out.
Cheers
Mel
redwing
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@redwing
Join Date: 2003
Post Count: 2,733
January 16, 2004 - 3:18 pm
[]
Remembering that you have entry and exit fee’s with any quick deals and CGT to contend with,or, if you’re just trying to access your equity… why not speak with your bank/broker and see if you can refinance taking your original loan back up to 80% ??
Just ideas here, i’d contact mortgagehunter or Terryw for a better picture of your options
REDWING[]
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
Still in School
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@still-in-school
Join Date: 2003
Post Count: 1,844
January 16, 2004 - 9:13 pm
Hi Burbonbill,
Yes it is legal, but while sell when you can use the collateral from that property to purchase more IP?
Just a thought though
Cheers,
sis
People 4get that by saving just $3 a day & investing it sensibly
over a working life, you’ll end up with around $1 million
The DIY Dog Wash
Member
@the-diy-dog-wash
Join Date: 2003
Post Count: 696
January 16, 2004 - 10:59 pm
BB[8D][8D]
I agree witht these guys, don’t sell if it isn’t costly you everything, set up a LOC and use the equity to fund future purchases, remember you only need 20% plus costs.
Cheers
Leigh K[]
Carve your own path and lead the way …
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
January 17, 2004 - 1:57 am
Bill
Yes you can do it legally. There are basically 2 ways.
1) cross securitise you existing property with the new. When you sell the exisiting one, the lender will need to revalue the remaining one. If it has gone up in value and the remaining laon will be 90% of its value or less, then ok.
2) Withdraw equity from the existing loan (eg redraw, LOC etc) and use this as deposit for teh new one. When you sell the existing property you would have to repay this money as the security will not remain. So you may have to get the new one revalued as above, or find the money elsewhere.
Terryw
Discover Home Loans
North Sydney
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Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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