I am keen to use the equity in my home to invest - maybe real estate. Maybe another option. Does anyone have any firm advice on the available options at the moment?
Hey Jimmy, this is a great step you are taking but one that does require caution. you need to understand what investment type will match not only your risk tolerance but also your personal goals and your family situation. Therr is a lot of choice.
I would highly encourage you to speak to an adviser that can help map out your options. Let me know if I can help.
Jimmy. Hi. Thanks for your question. In regard to "firm" advice, that would be a little difficult without getting a better understanding of your needs. At this point, I can simply say that I have access to many lenders who would allow you to access the equity in your home for worthwhile investment purposes.
From a target perspective it is good to remain below an 80% Loan to Value Ratio (LVR), by doing this there would no insurance iciest involved, however it would be possible to go to a maximum of 90% of the value of your home.
I note you are relatively close and I would be happy to meet with you to discuss strategies, loan structures etc.
please give me a call if you would like to chat.
1300 ASK KEN
You have a few options. If you have equity in your current home, you can either cross collateralise (use your house as security) to purchase an investment property. This means you don't need to fork out any of your own cash towards the new purchase. The good thing about this is that if you have great equity, your LVR (loan to value ratio) may be under 80% which means you won't be charged LMI (lenders mortgage insurance).
In addition, you'll be rewarded a better rate by the lender with a LVR under 80%.
Alternatively, you can access your equity in cash, which you can use to out towards your purchase such as your deposit, stamp duty, government, and solicitor fees.
I live in Cronulla myself, more than happy to grab a coffee with you to discuss!
0402 503 739
Hello James. We are finance brokers based in Parramatta. We have an extensive network of investment specialists who can assist. We work with agents and developers in arranging investments (including interstate). We also arrange the finance of these deals. Feel free to call me if you wish to discuss. Mehdi from Smartline 0428114324
Hi Jimmy I have many options available and we can do the application over the phone & email. 85% no LMI option available can also assist with equity release on existing property. I am available to assist you further & conduct a no obligation assessment.
Investing for your future is a great idea, but the strategy and investment type that works for one person will be quite different to another.
I would recommend that you speak with a qualified financial advisor to discuss your goals, your risk tolerance and what you can realistically afford.
If you decide to invest in property, use a broker who has experience with investment property rather than just residential lending
Great question Jimmy
There are quite a few options available to invest using the equity in your existing home. You could as you say, look to purchase an investment property and you could also work closely with a financial adviser to understand such options as a share portfolio, managed funds or a combination.
It is really important to understand what options work best for you based on your current financial situation and your appetite for risk for all investment options.
One thing you need to be aware of with your current home loan provider is their cash out restrictions. If you are looking to increase your current home loan for investment purposes many lenders have certain restrictions on how much cash out (how much in $ value of the equity) you’d like to use for investment. This is very much the case when you are not using the equity to purchase an investment property.
Many lenders will request you provide some sort of evidential proof of how the additional funds are going to be used and cash out restrictions tend to vary from $50,000 to around $100,000.
It is a very important question to ask your current home loan provider and be sure to pass the information through to the adviser you are seeking advice from.
All the best
Hi Jimmy, you have plenty of options but the key is understanding leverage, risk management and buffers. If you can get balance across both shares and property, together with planning for lifestyle transitions you will be on to a winner. Happy to have a chat - I'm in Melbourne and Sydney, Financial Planner for 10 years and mortgage broker for 3 years - 0412226009
Essentially you've got a number of options:
1. Use a line of credit/new mortgage to purchase real estate.
2. Use a line of credit/new mortgage to purchase shares directly
3. Use a line of credit/new mortgage to purchase managed funds (investment vehicles where a fund manager manages your money on your behalf, superannuation typically is an example of one such scheme)
All of the above will depend on your goals and what you want to achieve and what your investor profile indicates.
I'm sure you have received many responses to your query as this is exactly what we like to help with.
Fortunately you would have many options, most of the outcomes though will depend on how much equity and your borrowing capacity.
Happy to do a RP Data report on your address if that will help?
Be aware of changing tax laws around using Line of Credits FR investment purposes and reducing your investment loan balance. The ATO are cracking down on this and not allowing deductible interest in these circumstances if you have reduced your mortgage - you will lose the maximum benefit you are able to claim!
Feel free to contact me if you have further queries. There are some really smart and innovative loans available especially through some mortgage managers & mortgage originators compared with the banks.