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  1. #1

    Default How to tap on your equity to purchase another IP

    Hi,

    I'm a noob still and has a lot to learn with investing. I have 3 properties (2 IP and 1 PPOR).

    I want to use the equity I have sitting between my 2 IPs to buy another IP. The 2 IPs are with same bank, I think my first error as an investor ie cross-collateralisation.

    So my question is, if I want to put the new IP with another bank I was told that I need to take that equity $ from current bank to use as the deposit with another bank.

    My only concern (or should it be?) is that top-up loans is technically doing a new finance application. Are there other ways you can get your equity from a bank so you can use this as deposit for another IP purchase?

    Many thanks!

  2. #2
    Join Date
    Oct 2013
    Posts
    1,638

    Default

    Nope, no other way. To get equity out is to apply for further finance. You apply for a revolving credit facility or offset loan (depending what your bank offers) and keep the cash in there so you don't pay interest until you make the new purchase.

    Speak to a mortgage broker!
    AAT Accounting Services - Property Specialist Accounting - AATAccounting.co.nz
    Lower fees for investors, traders & real estate agents!
    [email protected] for more information.

  3. #3
    Join Date
    Feb 2018
    Posts
    126

    Default

    Banks these days require valid reason for a big top up.

    If your reason is to use as deposit to buy an IP with another bank, they will say no.

    Get an experienced mortgage broker to map this out for you.

  4. #4
    Join Date
    Mar 2015
    Location
    Brisbane Wellington Auckland
    Posts
    831

    Default

    Quote Originally Posted by ak22 View Post
    Hi,

    I'm a noob still and has a lot to learn with investing. I have 3 properties (2 IP and 1 PPOR).

    I want to use the equity I have sitting between my 2 IPs to buy another IP. The 2 IPs are with same bank, I think my first error as an investor ie cross-collateralisation.

    So my question is, if I want to put the new IP with another bank I was told that I need to take that equity $ from current bank to use as the deposit with another bank.

    My only concern (or should it be?) is that top-up loans is technically doing a new finance application. Are there other ways you can get your equity from a bank so you can use this as deposit for another IP purchase?

    Many thanks!
    Is your PPOR unecumbered ? Or is financed with the same bank ?

  5. #5
    Join Date
    May 2007
    Location
    Hamilton
    Posts
    3,635

    Default

    Hi ak22,

    This might help - very basic video showing how you can use two banks

    https://www.facebook.com/theproperty...8332332986058/

    Ross
    More Profit from Property? TEACH ME MORE
    Ross Barnett - Coombe Smith Property Accountants
    Proud to give the best property advice for over 13 years.

  6. #6

    Default

    Thanks all so much for the input.

    I tried talking to ANZ (where the 2 IPs are) and they seem to be keen to do a revolving credit but with new finance application.

    but I will definitely talk to a good mortgage broker. These are hard to find nowadays. The good ones tend to be very busy.




    Quote Originally Posted by Rosco View Post
    Hi ak22,

    This might help - very basic video showing how you can use two banks

    https://www.facebook.com/theproperty...8332332986058/

    Ross

  7. #7

    Default

    Quote Originally Posted by Beano View Post
    Is your PPOR unecumbered ? Or is financed with the same bank ?

    Hi Beano,

    The PPOR is on its own bank. I managed to do a top up with ANZ and used that to finance the PPOR.


 

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