May 04, 2016
One of the biggest advantages of home ownership is building equity – it could be your best financial resource.
Home equity is the difference between your home’s current market value (not what you paid for it) and the balance of your home loan.
In the past, the only way to access this equity was by selling your home. But these days many lenders will let you borrow against equity, giving you an opportunity to invest in a rental property, complete home renovations, buy a new car, take a well-deserved vacation or give your children a private school education.
Some strings do apply
The beauty of using home equity is that you can borrow money at record low home loan rates. However your lender will still need to see evidence that you can comfortably manage the loan repayments. We can help you work out how much you can borrow based on your current situation.
Act as a guarantor for a first home buyer
Did you know you can use your equity to act as a guarantor for a first home buyer's loan? More than just a way of getting their deposit over the line, it can also mean avoiding the cost of Lenders Mortgage Insurance. If you have a close family member looking to get into the property market, give our office a call to find out how you can help.
So how do you access home equity?
The good news is that the process can be very straightforward. Talk to us about the easiest approach. It may be a loan top up (although this may incur a fee) or you can look at refinancing your loan. The latter is often best suited when using home equity to buy a rental property, as different lenders are now applying stricter criteria to investment loans.
To find out how you could take advantage of home equity, please don't hesitate to get in touch with a broker from our office on 03 9748 7999.