Calculating Equity

[macdub]

Hi Guys,
Quick question.
PPOR - 350k owing
IP1 - two loans
1. 45k (equity loan from PPOR?)
2. 315k

Now if I want to borrow more and calculate equity on PPOR, how does this work?
If valuation comes say 480k - The equity is

480 - (350+45) = 85k

Is this correct?

 

[D.T.]

480k ppor
Go up to 90% = 480*.9 = 432
Minus from that your 350k and 45k loan gives 37k equity to play with.

Might be able to get similar again from your IP?

 

[macdub]

Thanks Dave. If I have another 30k in offset then PPOR owing amount will be 320k instead of 350k, am I right? And 320k will be used in calculation of equity?

 

[D.T.]

Do you mean offset or do you mean redraw? Some people get them confused is all.

If its in offset, then i wouldnt include it in the calc. But you could use that along with that 37 to make it 67k deposit for new place if you wanted... but you're probably better off keeping it in offset for SANF / buffer.

 

[Jamie M]

Agree with Dave.

If you're going to pump some of that offset money into the loan and re borrow - just make sure you leave enough in the offset to allow for a bit of SANF.

Cheers

Jamie

 

[Terry_w]

Hi Guys,
Quick question.
PPOR - 350k owing
IP1 - two loans
1. 45k (equity loan from PPOR?)
2. 315k

Now if I want to borrow more and calculate equity on PPOR, how does this work?
If valuation comes say 480k - The equity is

480 - (350+45) = 85k

Is this correct?

It is simply value minus loans secured on the property.

Is your IP secured by your PPOR? (cross collateralised?) is the $45k secured by the PPOR?
if not
then

480-350 = 130

But usuable equity would be

$480,000 x 80% (or 90%) less existing loans = $34k based on 80% LVR

 

[Rolf Latham]

needless to say, get an upfront valuation on the property before doing your application to ensure you have the equity you expect

LMI paid on purchase ?

ta
rolf

 

[macdub]

Thank you all for your swift replies. I have some more questions.
Yes 45k on IP is secured against PPOR!! Is this bad? It was first time had no idea how to set everything up.

If I have 45k secured against PPOR, when I sell IP, do I have to pay off this 45k as well or I can choose not to and just pay off 315k owing on IP?? Can I park leftover money (after paying 315) in offset linked to PPOR?

Also, how do I request valuation, just call the bank? Do they charge any fees for this?

thanks

 

[Rolf Latham]

If I have 45k secured against PPOR, when I sell IP, do I have to pay off this 45k as well or I can choose not to and just pay off 315k owing on IP?? Can I park leftover money (after paying 315) in offset linked to PPOR?

if you have enough equity on the IP you might be able to do a port OR a refinance using the IP thus paying out the 45

Also, how do I request valuation, just call the bank? Do they charge any fees for this?

thanks

depends on lender,most wont do it, some will.

ta
rolf

 

[macdub]

I don't think I have any equity in IP. In fact, it is in negative equity

 

[Rolf Latham]

I don't think I have any equity in IP. In fact, it is in negative equity

then it will be hard to refinance I guess

ta
rolf

 

[macdub]

Ohh I see..so when I refinance, they will look at both PPOR and IP? As my PPOR is performing well, I thought of borrowing more on PPOR valuation..