Owning your own home brings so many great things like a roof over your head, a place to raise a family, an investment vehicle, and a forced savings account that gives you financial security. Most homeowners achieve this financial security by creating home equity faster!
The equity in your home is simply the value of the property minus any outstanding loan.
The great thing about real estate is that you’re able to access that uplift in equity to put towards a deposit on another property. It’s also possible to use those funds to put towards your current property to increase its value even further through things such as a renovation or even a subdivision where possible.
Get Bank Valuation
A bank valuation helps the lender determine their overall risk on the property. If you are looking at borrowing your home equity, you are going to need to rely on a bank valuation – but the good news is different banks use different valuers.
Most lenders will lend you up to 80% of the property’s value. While it might be possible to access more than that, you would then be required to pay Lenders Mortgage Insurance, and that would potentially limit the number of lenders.
How to Access Equity
The most common way of accessing equity is through refinancing. When you refinance, you are effectively taking out a new loan and paying out your old loan. In this process, the lender will order a bank valuation, which will ideally show that your property has increased in value.
There are other ways to access equity, such as cash-out loans, topping up your current loan or even using things like lines of credit. However, it’s important that you speak to a mortgage broker about your personal situation.
The other important consideration when accessing equity that many people overlook is that you will likely have to be able to service any additional equity that you are wanting to redraw. Even if your home has grown substantially, if you are not earning a high enough income to service any debts on a larger loan, you will not be able to access the equity.
Secure Mortgage & Finance ensures that you get the best deal that suits your personal and financial situation. We know what loan product works for you and what you should be paying and how often. We are here to assist in the best possible manner and help you secure your dreams!!
For a stress free mortgage experience, Contact us on 044 9556 957 or info@securemortgageandfinance.com.au