All Topics / Finance / investment loans using equity

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  • Profile photo of lukootlukoot
    Participant
    @lukoot
    Join Date: 2010
    Post Count: 6
    February 5, 2016 - 9:57 am

    Hi,

    Im not sure if i am over thinking or have fried my brain with to many things at once so dont judge me lol…regardless of how much equity i have in my PPOR (100%) to get an investment loan and to avoid LMI i need a 20% deposit right?
    so if i were to use equity from my PPOR what would the loan structure look like for the new investment loan and would this mean i would owe the amount of the deposit on my PPOR?
    Is there any other ways to get the deposit with out having to create finance on my PPOR other than saving for a cash deposit?…. this is where i was thinking about a line of credit… would this be an option?

    Thanks in advance
    luke

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    February 5, 2016 - 11:01 am

    Hi Luke

    To avoid LMI on an IP purchase you need to contribute a 20% deposit and enough funds to cover purchase costs (stamp duty, etc).

    That 20% deposit and costs can either come from:

    – Equity that is accessible in your current property
    – Savings
    – A combination of the two

    If you don’t want to use equity in your PPOR – then you’ll have to use cash. Please note – the latter is not deductible though.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

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