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From: Gail Hubble
I'm a beginner and a bit confused. Everyone says you can borrow without a deposit for an IP as long as you have equity in your house. I have plenty (I owe $130,000 on a house worth about $300,000) and would prefer to borrow the whole amount for the IP for tax reasons, but the lenders I have spoken to have all indicated that they want a 10% deposit (which I would then have to redraw off my primary home loan). I would rather leave my home loan as it is. I queried the possibility of a second mortgage, but they all said that because they would be coming in second after another mortgagee, the rates would be really high. So, what does everyone actually mean when they say "use the equity in your home to borrow for an IP". Does that mean a second mortgage, or simply redrawing funds for a deposit? Plus they will only lend me $200,000,even though the IPs I have in mind are all positively geared. I thought I would be able to borrow more. Have I missed something?
Gail
I'm a beginner and a bit confused. Everyone says you can borrow without a deposit for an IP as long as you have equity in your house. I have plenty (I owe $130,000 on a house worth about $300,000) and would prefer to borrow the whole amount for the IP for tax reasons, but the lenders I have spoken to have all indicated that they want a 10% deposit (which I would then have to redraw off my primary home loan). I would rather leave my home loan as it is. I queried the possibility of a second mortgage, but they all said that because they would be coming in second after another mortgagee, the rates would be really high. So, what does everyone actually mean when they say "use the equity in your home to borrow for an IP". Does that mean a second mortgage, or simply redrawing funds for a deposit? Plus they will only lend me $200,000,even though the IPs I have in mind are all positively geared. I thought I would be able to borrow more. Have I missed something?
Gail
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