Equity release strategy

Discussion in 'Loans & Mortgage Brokers' started by couq, 9th Apr, 2017.

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  1. couq

    couq Well-Known Member

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    Hi everyone,

    I am in the process of releasing equity and then having it sit in an offset against it before I buy in another account with same bank.

    Can banks recall this equity once it is refinanced? Ie. if the property it is held against decreases in value (if there is a correction)
     
    couq, 9th Apr, 2017
    #1
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Typically, if you use a term loan NO

    if you use a LOC there is an increased risk of that

    ta

    rolf
     
    Rolf Latham, 9th Apr, 2017
    #2
    Terry_w likes this.
  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    But a lender can apply cash you have in accounts against any debts owed.
     
    Terry_w, 9th Apr, 2017
    #3
  4. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    I've never seen it happen

    Cheers

    Jamie
     
    Jamie Moore, 10th Apr, 2017
    #4
    Ross Forrester likes this.
  5. Corey Batt

    Corey Batt Well-Known Member

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    Lenders technically have clauses within their contracts which will enable them to draw from your funds that they have access to - to reduce the debt if necessary. In reality this is generally does not happen unless there's adverse circumstances. Where this is more likely to happen is with a LOC being reduced/cancelled.
     
    Corey Batt, 13th Apr, 2017
    #5