How Your Home Equity Can Help You Borrow Funds to Buy Next Property

The equity you have accumulated in your home loan can help you grow your portfolio of properties as well as in buying your first investment property in Australia.

To know about home equity is the simplest way – it is the market value of your existing real estate property and the balance remaining to be paid off from your home loan. If you have an existing property bought through a home loan, you equity can increase over time by making extra repayments and with the market value of the property in that increases during the tenure of your home loan.

Once the equity has increased in your property, you can avail various home buying options in Australia to purchase additional investment properties, upgrade your current home, purchase a new vehicle, buy shares to diversify your financial portfolio or even for travel and vacation.

Once you are determined to access the equity in your home, the nest step is to valuation of your home to determine the current market value.

Let’s say –

• You bought a property in the year 2010 for $200,000.
• Market value of the property at present is $275,000
• Loan amount you still need to pay is $100,000
• The equity available in your home is $175,000

After determining the amount of equity, you can initiate the application process to refinance the existing home loan. With equity in your home,you can avail loans up to 90% of the value of the property and is subject to serviceability and credit checks.

However, before you make up your mind to use the equity in your home, make sure that you have clear financial goals as per your overall financial position.The ideal solution to stay away from hassles or rejection in some cases is to seek independent financial advice from authorised financial expert.

If you are willing to know more about using equity to buy a property, talk to the specialist at Loans Direct. You can be sure of finding the most suitable Home Buying Options in Australia.