Hi Guys,
So far in the books I have read, one of the main opinions is that using equity is the best way to purchase more properties more quickly.
I am a bit confused...whats the difference between drawing equity from say your PPOR and just getting another mortgage for 100%+costs of the purchase price of your next property.
You pay interest on the equity, and on the loan so whats the difference?
All I can see is that it means you don't have to save cash for a deposit, but are you not effectively borrowing 100% of the purchase price when you use equity to purchase a property? so why not just get a 100% loan (assuming you could?)
I just don't understand how having huge amounts of equity helps you when it seems to be the same as going out and getting another loan
Would be great if someone could clear it up for me!
So far in the books I have read, one of the main opinions is that using equity is the best way to purchase more properties more quickly.
I am a bit confused...whats the difference between drawing equity from say your PPOR and just getting another mortgage for 100%+costs of the purchase price of your next property.
You pay interest on the equity, and on the loan so whats the difference?
All I can see is that it means you don't have to save cash for a deposit, but are you not effectively borrowing 100% of the purchase price when you use equity to purchase a property? so why not just get a 100% loan (assuming you could?)
I just don't understand how having huge amounts of equity helps you when it seems to be the same as going out and getting another loan
Would be great if someone could clear it up for me!