How to tap on your equity to purchase another IP

[ak22]

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!

[Anthonyacat]

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!

[GLin]

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.

[Beano]

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 ?

[Rosco]

Hi ak22,

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

https://www.facebook.com/thepropertyaccountant/videos/1338332332986058/

Ross

[ak22]

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.

Hi ak22,

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

https://www.facebook.com/thepropertyaccountant/videos/1338332332986058/

Ross

[ak22]

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.