I have equity on a IP of 160k, the house is valued at 350k, it's currently renting at $300 wk, my earnings are 120k …I'm now looking to invest in another IP but I'm unsure of how much of my equity is need for a house that's valued at 450k?
Thank you in advance. Any advice is greatly appreciated.
I'm new to this, so forgive me on my limited knowledge!!It depends, you can get loans up to 95% + LMI (Lenders Mortgage Insurance) of the value of the house, which means on a $450k property you will need about $22,500 + costs (duties, legal and other) Rule of thumb, costs are about 5% purchase price.
To avoid LMI costs you need to get a loan lower than 85% (some banks) or 80% all. So on a $450k property that is $90k.
This means you may just be able to draw down 90k on IP1 to fund IP2 without any LMI. However you will need to cover costs, so you may need to bump up your borrowing to just under 85% on both loans.
Hi B2 luck
I’d look to take out a loan of around $360k for your next IP (80% LVR – which avoids LMI)
This means you’ll need to access about $105k in your current IP which should give you enough for a 20% deposit and purchasing costs.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Thanks Guys,
That has cleared things up for me.
I'll continue to find out as much info as I can, then when the time is right I'll start looking!!Thanks also on your prompt reply.
Hello B2 Luck
We can help with all of what you needs are in both finance and property.
The advice from Jamie is spot on so run with him first his is the best answer for all concerned.
We have property all over australia, some negative geared cash positive, some negative geared negative cash flow.
Bluegrass
You must be logged in to reply to this topic. If you don't have an account, you can register here.
