Hi all
I'm about to exchange on my 2nd IP for ~$500k and I'm having a think about the best way to finance this.
For this deal, I can get a 90% LMI waiver from my lender (Lender B) so can borrow up to 90% LVR and can either:
1) Pay the 10% deposit + purchase costs with CASH (approx. 70k). This still leaves me with cash reserves of approx. 200k
2) Reval/refinance my IP1 up to 80% LVR - which is from Lender A (ie. different lender to the one I can now get a 90% LMI waiver from). This gives me conservatively 80-90k of equity (or up to 180k if being a bit more ambitious) of which I can then use 70k to put towards IP2 (the 10% deposit + transaction costs). This scenario won't require me to use any of my own Cash.
I want to avoid using as much of my cash as possible so option 2 achieves that although I just want to know will this cause potential problems down the line of being too highly geared (assuming lower scenario when it comes to my reval) ie at 80% LVR for IP1 and 90% for IP2?
Also, does it create a messy situation where my IP1 loan is partly used for IP1 and also used for IP2?
Generally how long will it take for the bank to arrange a valuation, refinance and then disburse funds for a deposit?
Another other advice/suggestions would be greatly appreciated. Thanks for taking the time to read through!
I'm about to exchange on my 2nd IP for ~$500k and I'm having a think about the best way to finance this.
For this deal, I can get a 90% LMI waiver from my lender (Lender B) so can borrow up to 90% LVR and can either:
1) Pay the 10% deposit + purchase costs with CASH (approx. 70k). This still leaves me with cash reserves of approx. 200k
2) Reval/refinance my IP1 up to 80% LVR - which is from Lender A (ie. different lender to the one I can now get a 90% LMI waiver from). This gives me conservatively 80-90k of equity (or up to 180k if being a bit more ambitious) of which I can then use 70k to put towards IP2 (the 10% deposit + transaction costs). This scenario won't require me to use any of my own Cash.
I want to avoid using as much of my cash as possible so option 2 achieves that although I just want to know will this cause potential problems down the line of being too highly geared (assuming lower scenario when it comes to my reval) ie at 80% LVR for IP1 and 90% for IP2?
Also, does it create a messy situation where my IP1 loan is partly used for IP1 and also used for IP2?
Generally how long will it take for the bank to arrange a valuation, refinance and then disburse funds for a deposit?
Another other advice/suggestions would be greatly appreciated. Thanks for taking the time to read through!