PPOR make up shortfall with cash or equity

Discussion in 'Loans & Mortgage Brokers' started by costanza, 20th May, 2021.

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  1. costanza

    costanza Well-Known Member

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    Say you buy a PPOR for 1m, bank is only willing to lend you 700k.

    Is is a benefit is using 100k equity from an IP and 200k cash, vs just 300k cash?

    Of course the 100k for IP equity release wouldn't be deductible, so if you've got the cash I thought 300k straight in for a LVR of 70% would be a good option.
     
    costanza, 20th May, 2021
    #1
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    100 k of liquid cash, vs 100 k of equity which may not be accessible at a later date

    ta
    r
     
    Rolf Latham, 20th May, 2021
    #2
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  3. beachgurl

    beachgurl Well-Known Member

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    Do u already have the 100k equity in cash/sitting in offset/redraw, or would u need to apply for a loan for that money? If u need a loan for it, then you wouldn't be able to borrow 700k for the purchase, as it would eat into your borrowing capacity.
     
    beachgurl, 20th May, 2021
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  4. Tony Xia

    Tony Xia Structured Loan Advisor Business Member

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    Taking that $100k out in equity and then parking the$100k cash you have on hand in the offset would be a good option.

    By making the deposit of $300k you or may not be able to take that equity back out at a later date.
     
    Tony Xia, 20th May, 2021
    #4