Just had an interesting meeting with my banker regarding releasing the equity in our home.
PPR is currently valued at around $465
We owe around $69k
Have a LoC for $80k
Bank will loan us $80% of the equity value ($372k)
Less the LoC Limit = $292k
Less the remaining loan on the PPR = $223k
They say they'll up that, to a "limit" of $229k (nice people eh!)
Ok all sounds good and I fully understand where she's going with all this, however:
She recommends leaving the $69k as a floating loan @ (currently) 5.65%
Leaving the LoC as is @ $80k ready to pay a deposit when needed.
And having the remainder balance ($223k) sitting around waiting for us to draw it down whenever we need it (doesn't say where it'll actually be though)
Is there a better way to ensure I have these funds available to me for deposits on my next IP's whenever I need them?
I was thinking about drawing down the equity to pay off the $69k loan on my PPR, but using the PPR as security for the equity drawdown.
Using this strategy, I'd create more leverage by being able to purchase several new properties, and the tax advantages on the new interest only loans, would outweight the PPR payoff - does this sound feasible???
Also, we may be looking to invest oversea's this year, and the equity could come in useful for that, but don't want to go through all the restrictions the bank may impose!
Isn't it OUR equity to do with as we please?
Never having done this before, I'd welcome some constructive and explanatory comments.
Thanks in advance.
PPR is currently valued at around $465
We owe around $69k
Have a LoC for $80k
Bank will loan us $80% of the equity value ($372k)
Less the LoC Limit = $292k
Less the remaining loan on the PPR = $223k
They say they'll up that, to a "limit" of $229k (nice people eh!)
Ok all sounds good and I fully understand where she's going with all this, however:
She recommends leaving the $69k as a floating loan @ (currently) 5.65%
Leaving the LoC as is @ $80k ready to pay a deposit when needed.
And having the remainder balance ($223k) sitting around waiting for us to draw it down whenever we need it (doesn't say where it'll actually be though)
Is there a better way to ensure I have these funds available to me for deposits on my next IP's whenever I need them?
I was thinking about drawing down the equity to pay off the $69k loan on my PPR, but using the PPR as security for the equity drawdown.
Using this strategy, I'd create more leverage by being able to purchase several new properties, and the tax advantages on the new interest only loans, would outweight the PPR payoff - does this sound feasible???
Also, we may be looking to invest oversea's this year, and the equity could come in useful for that, but don't want to go through all the restrictions the bank may impose!
Isn't it OUR equity to do with as we please?
Never having done this before, I'd welcome some constructive and explanatory comments.
Thanks in advance.
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