getting to equity during fixed period

[devo76]

Quick question with hopefully a quick answer.

Say you have a property worth $300,000 with a $150,000 loan fixed for 5 years.

If you wanted to pull out some of that equity for additional purchase.
Is this just a matter of getting another loan which would be fixed or variable in relation with the days rates.

or does the fixed loan give you problems.

I understand you could not extend the existing loan but what about a second loan secured against the property.

Cheers

 

[Propertunity]

Yes, breaking the fixed loan will incur "break costs".
You could get a 2nd mortgage (possibly even from the same lender as you have the fixed loan from, if you wanted).

 

[Rolf Latham]

Hi Devo

If

the lenders val works
and
the lender serviceabiility works
and
the lenders cash out policy works

then you can usually tack on another loan to the same security.

If u need to move because ONE of the 3 above doesnt work, then as Alan, said, you are likely up for cash to move.

Most lenders wont take a second for a cash out position, but MAY take a collateral second mortgage if the first mortgagee agrees to a deed of priority

ta

rolf

 

[devo76]

t this is what i have done in the past

I have a PPOR worth $400,000 with a loan of $100,000 attached.
I started a second loan with the same lender for another $200,000 secured to the PPOR for investment purposes. This i have done with no problems but loan is not fixed.

My next IP when built will have about $100,000 equity when built.
I was thinking of fixing the build costs loan and drawing out the $100,000 equity and leaving this loan variable to be used for future IP purchases.

I figured this would be ok assuming as said that i meet the banks guidelines.

 

[Rolf Latham]

t this is what i have done in the past

I have a PPOR worth $400,000 with a loan of $100,000 attached.
I started a second loan with the same lender for another $200,000 secured to the PPOR for investment purposes. This i have done with no problems but loan is not fixed.

My next IP when built will have about $100,000 equity when built.
I was thinking of fixing the build costs loan and drawing out the $100,000 equity and leaving this loan variable to be used for future IP purchases.

I figured this would be ok assuming as said that i meet the banks guidelines.

I would let them know that you want this and get an email approval that you service and they are ok with the cash out before u fix

ta
rolf