If you already own a home or some investment properties, accessing the equity can help you secure finance for another property purchase. Your equity is the difference between what the house is worth on today’s market, and how much you owe against it.
Put simply, your property’s equity will increase both as you pay off your mortgage and as the property’s value grows. For example, if your $500,000 property increases in value by 10% over the two years you own it, that’s an extra $50,000 in equity—and you can also add in any reduction you have made to the mortgage from your repayments.
Depending on your financial circumstances, it may be possible to refinance your mortgage to access that money. This will help to increase your deposit amount for your investment property and also help to increase your borrowing capacity. Just ask us and we’ll help you determine if this is the case.
In order to access the equity in your existing property, you will first need to obtain an accurate valuation from a reputable valuations expert. We can help you with this, so don’t hesitate to ask us for assistance! The lender will also obtain a proper valuation, so this is an important step when you are considering accessing your equity. You might also want to consider ways to add to the equity in your existing property by making improvements or renovations. This can be a fast way to increase your borrowing capacity so you can get into your next investment sooner.