HiOlive,
You are understnding it just fine actually and your questions are valid.
Revluing is when you get the bank to reappraise how much the house is worth..
sy you bought for $300k... 10 years later, your mortgge is $150k. You ask the bnk to vlue your house nd they come bak with $600k. YOu owe 25% of the house value. Bnak may let you borrow up to 80% ($480k in total). So you could borrow another $130k. The most commonly spoke about way of doing this seems to be Line of Credit, which is what I have used.
So say you did this and now have a mortgage of $150k, an a Line of Credit you can use of $130k.
You find a $300k property you love as an IP proposition.
So you see nother lender and say, I've got the depsosit, it shodl rent for this much (they may change this figure a bit, and will count only 80% of what eer figure they usee), your income and your current loans, inlcuding the Line of Credit (they will ask for it's max value). They will add all that up as if the Line of Credit is fully drawn and see if you meet their lending criteria.
Hi Jaycee, could you explain how you came to the borrowing of $130k? According to the above example. Thanks for your time.