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Best way to access equity for private use

Discussion in 'Property Finance' started by SupaRex, 14th Apr, 2016.

  1. SupaRex

    SupaRex Member

    Joined:
    2nd Jul, 2015
    Posts:
    10
    Location:
    Mornington Peninsula, Victoria.
    Hi All,

    My Dad has an IP. Loan amount is ~$140K, value would be ~$240k, so about $100k equity.

    My Dad is pretty old school and was thinking about selling the property to access the equity. The purpose of the loan is to fix up his PPoR.

    I'm wondering if anyone would be kind enough to suggest the "best way" for him to access this equity (rather than just selling).

    Dad's 64, but not looking to retire just yet. He's only had the property for about 4 years (better late than never!).

    I'm happy to provide more information if needed.

    Just would really appreciate some help.

    Many thanks,
    SupaRex
     
  2. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    1,167
    Location:
    Adelaide, SA
    Standard separate split for an equity release - very simple. Based on the figures he could access around 52k to bring the total LVR up to 80% and avoid paying any LMI costs.

    Most lenders will be OK with his age, they may require an accelerated repayment term to make sure he doesn't have the debt into old age, but if he can afford it that's not necessarily a bad thing.
     
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  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Location:
    Sydney
    If the original loan relates to that property and the equity will be used to improve that house then all you have to do is increase the existing loan.
     
  4. SupaRex

    SupaRex Member

    Joined:
    2nd Jul, 2015
    Posts:
    10
    Location:
    Mornington Peninsula, Victoria.
    Hi Terry,

    The new loan will be for a different property - Dad's PPoR.

    I'm just looking at options for accessing the equity.
     
  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
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    Location:
    Sydney
    In that case it should be split. Ideally as an IO loan which can be paid directly back into the loan at settlement and then drawn down as needed.
     
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