How to use PPOR equity for IP deposit

[hongsta]

Hi all

I want to use the equity on my PPOR to purchase an IP and want to know how I should go about doing this. Current scenario:

PPOR bought for 265K (IO loan)
Should be worth between 300-315K+ now (based on other sales)

So can anyone give me advice on where to start?
Do I get my current bank to give me a val? And then how do I use the equity for a deposit? Do I need a LOC?
Can I use a separate bank, or would I need to go with the same lender?

Let me know if you need more info

Thanks

 

[Aaron_C]

Get broker to order upfront valuation on your property and see if there is any equity. Then do a cash out and use that for the next deposit.

 

[Jamie M]

Hello

You usually set up a second loan against your PPOR which covers the deposit/costs on your IP purchase. You then set up a seperate loan to cover the remaining balance for the IP.

So to basically illustrate - it looks like this.

PPOR
Loan 1: Current PPOR loan
Loan 2: Equity release to cover deposit/costs on IP

IP
Loan 3: Loan to cover the remaining balance for the IP

Some lenders will allow you to take your borrowings up to 90% LVR.

To work out how much equity is available to you, we'd need to know what your current loan amount is.

Cheers

Jamie

 

[hongsta]

Thanks guys.
@Jamie, the loan amount on my PPOR is 240k.
Re: getting val, does the bank charge for this?

 

[Aaron_C]

Thanks guys.
@Jamie, the loan amount on my PPOR is 240k.
Re: getting val, does the bank charge for this?

Depends. Who is lender?

 

[hongsta]

homeside / NAB

 

[Terry_w]

homeside / NAB

You are in luck!

 

[Aaron_C]

homeside / NAB

No charge get broker to do it for you.