A few months ago, I had posted for some opinions on the advs/disadvs of selling our IP which used to be our PPOR (we have just hit the 6 year mark). I am now thinking that instead of selling, I should get some equity out of the property into a LOC. At the same time, will request a LOC against our current PPOR.
IP worth $820k, loan balance is $500k
PPOR worth $820k as well, loan bal is $420k (with $125k in redraw, and $30k in offset (savings account)), so we are actually only paying interest on less than
300k. Ordering a reval this week, last val was in 2008.
current net household income is $10k per month.
My question is: are values of LOCs determined based on equity AND serviceability (current income), or just the equity ? What happens if in the future, the LOC facility is available (approved), but income situation changes ie. less income ? Will the bank adjust the LOC balance at that point in time ?
IP worth $820k, loan balance is $500k
PPOR worth $820k as well, loan bal is $420k (with $125k in redraw, and $30k in offset (savings account)), so we are actually only paying interest on less than
300k. Ordering a reval this week, last val was in 2008.
current net household income is $10k per month.
My question is: are values of LOCs determined based on equity AND serviceability (current income), or just the equity ? What happens if in the future, the LOC facility is available (approved), but income situation changes ie. less income ? Will the bank adjust the LOC balance at that point in time ?