Accessible Equity

[sarahodesk]

Hi All,

Here is my scenario:

Investment Property
Loan amount: $600K (87% LVR when the mortgage was taken, so LMI included), lender bankwest
Rpdata estimate: $860,000 (range $800K to $950K) wth confidence level low - (too optimistic to my view. A 4x2 house of the same block size and similar age on the same street was sold for $820K few weeks ago. Mine is 5x2, duplex).
Assuming $800K as conservative market value, my accessible equity shows 40K at 80% LVR. My question is:

1. Is there any way to further increase my accessible equity, e.g., LMI etc?
2. Who should I approach first (bank or brokers) for the most realistic figure because it involves valuation?

Thanks in Advance

Sarah

 

[Shahin_Afarin]

Get your broker to run a few upfront vals - they are free and can be used as part of the application if you decide to proceed.

Also get them to review your portfolio and see if bankwest is the best lender for what you want to do longer term.

 

[Aaron_C]

Broker first for sure to get an idea of valuation and how much equity you got.

 

[Rolf Latham]

On the surface I dont think you have a lot of choice

87 % LVR was probably a fair slab of LMI

unless you want to restrict to 80 % of new val,then new LMI payable.

Step 1. See if you can get a val out of BWA/Broker for same and see if that works

if thats no good, then do what the boys above have said, get an upfront val or 2 with a lender that suits your current and future goals . No point getting a smashing val,refinancing and then you find you need to move in x years time............

ta
rolf

 

[jonmardell]

If you have already paid LMI you can get credit for that with bankwest if your loan is above 80%. Basically they take the premium you already paid off the new calculated premium. If it comes down to cost then this will most likely be your cheapest option, it may however not be the best option for your circumstances.

Hi All,

Here is my scenario:

Investment Property
Loan amount: $600K (87% LVR when the mortgage was taken, so LMI included), lender bankwest
Rpdata estimate: $860,000 (range $800K to $950K) wth confidence level low - (too optimistic to my view. A 4x2 house of the same block size and similar age on the same street was sold for $820K few weeks ago. Mine is 5x2, duplex).
Assuming $800K as conservative market value, my accessible equity shows 40K at 80% LVR. My question is:

1. Is there any way to further increase my accessible equity, e.g., LMI etc?
2. Who should I approach first (bank or brokers) for the most realistic figure because it involves valuation?

Thanks in Advance

Sarah

 

[ems]

If you have already paid LMI you can get credit for that with bankwest if your loan is above 80%. Basically they take the premium you already paid off the new calculated premium. If it comes down to cost then this will most likely be your cheapest option, it may however not be the best option for your circumstances.

We've recently taken a 90% loan and have incurred LMI. Our plan is to renovate and then refinance and buy again. If we were to refinance to 90% again are you saying we can take the LMI from the first purchase and apply to the new loan? Will the second loan need to be through the same bank as the first?

 

[Aaron_C]

We've recently taken a 90% loan and have incurred LMI. Our plan is to renovate and then refinance and buy again. If we were to refinance to 90% again are you saying we can take the LMI from the first purchase and apply to the new loan? Will the second loan need to be through the same bank as the first?

Second loan will have to be with the same bank. It works as follows:
Initial Loan: 90% Loan, get charged LMI of $4,000.
Second Loan: Increase loan due to increase in equity of property - new LMI to be charged is $5,000. Since you already paid LMI with same lender, they will 'credit' the $4,000 already charged, so next increase in LMI is only $1,000.

 

[ems]

Second loan will have to be with the same bank. It works as follows:
Initial Loan: 90% Loan, get charged LMI of $4,000.
Second Loan: Increase loan due to increase in equity of property - new LMI to be charged is $5,000. Since you already paid LMI with same lender, they will 'credit' the $4,000 already charged, so next increase in LMI is only $1,000.

Thanks Aaron for the explanation

 

[sarahodesk]

Second loan will have to be with the same bank. It works as follows:
Initial Loan: 90% Loan, get charged LMI of $4,000.
Second Loan: Increase loan due to increase in equity of property - new LMI to be charged is $5,000. Since you already paid LMI with same lender, they will 'credit' the $4,000 already charged, so next increase in LMI is only $1,000.

Thanks all for your reply and I appreciate that.
So I can increase the accessible equity above 80% from the same lender, but I have to pay LMI for the extra loan due to increase in equity. This is exactly what I am after. I won't mind a few thousand dollars for LMI. Perth market is going crazy. In some suburbs equity gain (e.g., willetton and surrounding) is close to 100K+ in about one year period and to be honest, there is simply not enough supply of houses. Multiple offers are pretty common and houses are being sold in less than a week in good suburbs.