Hi All,
Apologies for posting in the wrong section or asking a silly question.
If i have $400,000 of equity in my home and would like to purchase a commercial property worth $350,000, will i be able to refinance my current home loan to release $350,000 to fund the commercial property purchase?
Looking at the banks websites, it talks about releasing equity but do they limit what the funds are used for?
regards,
Maple9
^ yes this is possible, but not all banks.
Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Possibly. Depends on the LVR of your home.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks Terryw,
What would it be for both situations:
My LVR is above 80%, can i also use guarantors?
Or my LVR is below 80% after releasing the equity?
Thanks
maple9
I don't understand, so will use an example
$600,000house
$200,000 loan
= $400,000 equity
80% of house value is $480,000. Less $200,000 existing loan = $280,000 useable equity. You could possibly set this up as a LOC.
If you are purchasing a $600,000 commercial property this LOC would be used as the 20 or 30% deposit and then you borrow the rest secured on the new property.
$600,000 x 70% = $420,000
$280,000 from the LOC.
$600k
You will have to factor in costs too.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Maple9 wrote:My LVR is above 80%, can i also use guarantors?
^ guarantors – No, not for cash out/equity release.
However it's possible to go to 90% LVR on your current loan and still achieve what your after, but would def be a lot harder and expensive.
Maple9 wrote:Or my LVR is below 80% after releasing the equity?
Perfect. As long as your income to can service the loan- easy done.
Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Thanks Terryw, that example helped
Cheers Michael.
Several banks have told me over the last 2-3 years that a residential property or equity in one can be used as security for a commercial loan, in particular a loan to buy a motel freehold or leasehold, and in doing so would only attract residential % rate.
Is that still the case in the current experience of the Forum's finance brokers ?
Would the same apply for buying other types of commercial property like shops, factories or office space etc ?
Cheers
thecrest
thecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
thecrest wrote:Several banks have told me over the last 2-3 years that a residential property or equity in one can be used as security for a commercial loan, in particular a loan to buy a motel freehold or leasehold, and in doing so would only attract residential % rate.Is that still the case in the current experience of the Forum's finance brokers ?
Would the same apply for buying other types of commercial property like shops, factories or office space etc ?
Cheers
thecrest
^ Yep, residential security for commercial purposes- resi rate.
Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Although did a nice size Commercial deal for a forum member during the week where the interest rate was actually cheaper on a Com rate that the client had on their residential loan.
On the figures you have outlined certainly should be doable.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
You must be logged in to reply to this topic. If you don't have an account, you can register here.
