Should I pay LMI to get more equity?

I have a few investment properties and all are around 80% LVR. If I am keen on extracting more money out of the equity does any one have thoughts on paying LMI and going for 90% LVR or more if possible when re-financing?
 
Hiya Shane

Lmi can be helpful for a few things

1. Provide a cash buffer
2. Provide deposit and costs for further investments

I dont believe there is a cookie cutter answer to this stuff, because much depends on earnings, current exposures, riks tolerances and a bunch of soft data.

In general, I believe LMI is your friend, a tool to be used when appropriate


ta
rolf
 
I would be very careful here...if you get into trouble there will be very little room to move.

At every stage of the property game....remember that the first rule is to preserve what you have now.

We are at the low point of the interest rate cycle...so look also at whether you can cope with higher IR.....because if can't the bank won't be willing to carry you as you already at 90% lend.:eek:

I have a few investment properties and all are around 80% LVR. If I am keen on extracting more money out of the equity does any one have thoughts on paying LMI and going for 90% LVR or more if possible when re-financing?
 
Thanks sash.I agree that preserving what I have is the most important thing. I also use equity to capatalize interest,so any IR rises can easily be covered using rent plus my line of credit.I will always make sure I have at least 5-10 years or more of interest payments available and account for rising rates.

It is different from posative cash flow investers but each to their own and good luck to everyone no matter what method they choose,I say.


I would be very careful here...if you get into trouble there will be very little room to move.

At every stage of the property game....remember that the first rule is to preserve what you have now.

We are at the low point of the interest rate cycle...so look also at whether you can cope with higher IR.....because if can't the bank won't be willing to carry you as you already at 90% lend.:eek:
 
I am really conservative....I have interest rate cover from both an equity perspective as well as positive cash flow currently running at $900pw.

I suspect in another 2 years....I will be paying a rate of around 7%...at that point I will be paying at least another 15K in interest per annum. So my CF+ assuming no rent increases will drop to $600pw...still not bad....and if I add any minimal rent increases across my portfolio I could conservatively be at $750pw CF+.

Thanks sash.I agree that preserving what I have is the most important thing. I also use equity to capatalize interest,so any IR rises can easily be covered using rent plus my line of credit.I will always make sure I have at least 5-10 years or more of interest payments available and account for rising rates.

It is different from posative cash flow investers but each to their own and good luck to everyone no matter what method they choose,I say.
 
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