investment through equity with no LMI

Discussion in 'Investment Strategy' started by igor1234, 15th Mar, 2022.

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  1. igor1234

    igor1234 Well-Known Member

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    for those who start, i just realised/discovered that you can buy a 2nd (3rd/4th) etc property, borrowing basically 104% without paying LMI. as long as u have enough equity in your home or your other investments.

    i always thought if u borrow over 80% u pay LMI. but apparently u r not. the loans btw are fully separated so you can tax deduct the new loan.

    quick scenario: u got a house worth 1M, with an outstanding loan of 600k. u can then buy another property worth 400k and borrow 420k. total loan now 1.02M, total value 1.4M. still under 80%. no LMI.

    Is that correct or have i misunderstood something?
     
    igor1234, 15th Mar, 2022
    #1
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    almost :)

    200 k available equity pull max on house one, 600 + 200 = 800 = 80 LVR and the 220 needs to include costs

    ta
    rolf
     
    Rolf Latham, 15th Mar, 2022
    #2
    Lindsay_W and igor1234 like this.
  3. Tony Xia

    Tony Xia Structured Loan Advisor Business Member

    Joined:
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    Bella Vista
    You'll go off by usable equity, $1m @80% minus your current loan, then that's the usable equity you got to use for your next property.

    On your example you have $200k

    If you were to purchase something for $400k, you'd draw out 20% + stamp duty.
     
    Tony Xia, 18th Mar, 2022
    #3
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