Accessing equity
- Thread starter S.T
- Start date
You can increase your loan with your current lender to 90% of the property value. You'll pay some LMI on the increase, but consideration will usually be given to the LMI you've paid. In other words, you'll pay a few hundred dollars instead of thousands.
If you take it to a different bank an new LMI policy will be put into play so you'll have to pay the full LMI again.
Some lenders are very picky when it comes to increases to 90%. It can generally be done, but they'll often want to know specifically what it's for and will often want evidence of this purpose. This can make a 90% top up tricky.
If you take it to a different bank an new LMI policy will be put into play so you'll have to pay the full LMI again.
Some lenders are very picky when it comes to increases to 90%. It can generally be done, but they'll often want to know specifically what it's for and will often want evidence of this purpose. This can make a 90% top up tricky.
Trying to get a LOC on a 90% cash out...I don't think so with the majors unless you are a super-strong client with an extremely good credit score. As Peter said they really want to know why you need the money - saying you may or may not want to purchase a property in the future is not good enough without the actual contract of sale. This is mortgage insurer policy and unfortunately is a real pain. However at 80% it won't be an issue.
A LOC may not be the best solution if you're simply accessing equity for an investment purchase. As Aaron indicates it's not a good match with a 90% lend either.
Likely the simplest solution is to increase your existing loan and set it up as interest only. It's probably cheaper and will work just as well as a LOC for accessing your equity.
Why don't you give one of the brokers here a call to help you implement the best approach?
Likely the simplest solution is to increase your existing loan and set it up as interest only. It's probably cheaper and will work just as well as a LOC for accessing your equity.
Why don't you give one of the brokers here a call to help you implement the best approach?
on the assumption that the purposes for the new funds are the same as the old.
Like Pete Said, give a broker a yell, 2 Melb based ones have already responded
ta
rolf
if you have already paid lmi to the majority level, see if u can push it for extra risk buffer.
As the guys have said, its hard , but likely not impossible.
If you do go80, make sure you DONT refi the existing loan, but take a new split.
That way,with most lenders will allow credit for the lmi premium already paid if u want to go back to 90 % again at some point
tarolf
ta
rolf
Or just wait until you have the new property in mind and do the new split / increase at that time..
Another option is do the increase / split application now and also do a pre approval for the new purchase at same time. You may get the condition that they wont draw down the top up / split until you find a property but at least you know you can access it then. This is a good way to force the lender to assess the whole deal rather than rubber stamping a pre approval that's not worth the paper its written on. Gotta push those bankers some times (all the time)!
Another option is do the increase / split application now and also do a pre approval for the new purchase at same time. You may get the condition that they wont draw down the top up / split until you find a property but at least you know you can access it then. This is a good way to force the lender to assess the whole deal rather than rubber stamping a pre approval that's not worth the paper its written on. Gotta push those bankers some times (all the time)!
Hi everyone,
I find this post is very informative, I am sure alot of other people are having the similar case as the original poster suggested. No doubt I am one of them.
One of my IP is similar to the case mentioned, paid LMI with 90% LVR few years back and now is standing close to 80% LVR. I understand from the above, there are a few options to access to 90% LVR with intention to buy another IP:
1. You can increase your loan with your current lender to 90% of the property value. You'll pay some LMI on the increase, but consideration will usually be given to the LMI you've paid. In other words, you'll pay a few hundred dollars instead of thousands.
2. increase your existing loan and set it up as interest only. It's probably cheaper and will work just as well as a LOC for accessing your equity.
3. if you have already paid lmi to the majority level, see if u can push it for extra risk buffer
4. If you do go80, make sure you DONT refi the existing loan, but take a new split.
That way,with most lenders will allow credit for the lmi premium already paid if u want to go back to 90 % again at some point
Am I understand these options correctly?
Can someone pls explain further on these options, how it works to "increase your existing loan...", "push it for extra risk buffer..." & "New split...".
Thank you
I find this post is very informative, I am sure alot of other people are having the similar case as the original poster suggested. No doubt I am one of them.
One of my IP is similar to the case mentioned, paid LMI with 90% LVR few years back and now is standing close to 80% LVR. I understand from the above, there are a few options to access to 90% LVR with intention to buy another IP:
1. You can increase your loan with your current lender to 90% of the property value. You'll pay some LMI on the increase, but consideration will usually be given to the LMI you've paid. In other words, you'll pay a few hundred dollars instead of thousands.
2. increase your existing loan and set it up as interest only. It's probably cheaper and will work just as well as a LOC for accessing your equity.
3. if you have already paid lmi to the majority level, see if u can push it for extra risk buffer
4. If you do go80, make sure you DONT refi the existing loan, but take a new split.
That way,with most lenders will allow credit for the lmi premium already paid if u want to go back to 90 % again at some point
Am I understand these options correctly?
Can someone pls explain further on these options, how it works to "increase your existing loan...", "push it for extra risk buffer..." & "New split...".
Thank you
Hiya
Many of these things may or may not apply to you, since personal circumstances may be very different.
Any detail explanation here wont mean much to you because its not around your personal circumstances.
Id suggest you get in touch with a broker or your banker, and ask them these questions and how these things may relate to you
ta
rolf\
