Using Your Equity in Your Property For Future Property Investing
Using your existing equity in your property for future investing is one of the most powerful ways of expanding your investment portfolio.
By extending your mortgage and using your equity to buy an investment property or assist with borrowing for other forms of investment can provide you with access to opportunities that you may have otherwise not been able to access.
The tighter credit policies of most bank lenders introduced since the GFC have made accessing your equity more difficult; however by using a professional Lending Specialist you can make the process far easier.
A good mortgage broker that is an active property investor can assist you to access your equity and provide you access to the lenders that will partner with you in fulfilling your investment goals.
When you are looking at property investment, one of the critical things to consider is not putting all of your eggs in one basket.
By using a number of different lenders, it may be far easier to acquire more properties faster.
Many people believe that having all of their loans with one lender can be beneficial for discount pricing and having access to a personal banker, however quite often it can also hamper your ability to borrow when you need to as well.
You also run the risk when having a large loan portfolio with one bank that it attracts unwarranted attention when the economy is affected by market forces outside the norms, which many people are testament to over the last two years.
A good personal banker is often promoted fairly quickly so there is no guarantee that you will have the same contact for long with your bank either, however with a good mortgage specialist you can build a long term relationship no matter which bank you lend through, and they can strategise with you to ensure that you are able to reach your goals as soon as you can.
Some of the benefits of spreading you loans and properties between lenders are as follows: It is easier to refinance single properties when additional equity is required for a new property purchase, as you do not have to move you entire portfolio.
You often have the ability to borrow more, as each lender has their own method of calculating your maximum borrowing amount, and this can vary greatly between lenders.
It is also easier in certain situations if a lender changes their serviceability calculators due to outside influences which ultimately reduces your borrowing ability with that lender.
If you have all of your loans and properties with that lender, it can prevent you to purchase an additional property when you know the timing if right to do so, or alternatively, if you want to refinance to a lender with a less restrictive policy, you need to refinance your entire portfolio instead of just one lender.
You will also have more potential to borrow through different ownership structures, as many lenders will not lend on the normal home loan rates for loans with company or trust structures, thereby restricting your ability to use these structures without the additional premiums of business bank facilities.
Certain lenders however are happy to lend to companies and trusts on a home loan basis, and a broker will always be able to guide you to the most appropriate lender for your individual needs.
In order to ensure your maximum lending ability is realised if and when you need to, there are a few things that need to be understood about banks and the way they evidence serviceability (your ability to afford the repayments) that can vary greatly between lenders.
Many lenders assess your existing loan commitments at a much more onerous repayment than you are currently making, which can make it very difficult to "service" your loan on their calculators, while others have a more realistic view of what your current commitments, resulting in a far higher borrowing ability with this lender.
A good Mortgage Professional will be able to guide you here to the most suitable lender if you are approaching the limits of your borrowing ability with certain lenders.
Credit card limits and personal loans can also greatly reduce your borrowing ability, and in certain situations you may not have any intention of using your credit card limit, however by simply reducing your limit, this can alter the outcome of your maximum loan amount considerably.
By extending your mortgage and using your equity to buy an investment property or assist with borrowing for other forms of investment can provide you with access to opportunities that you may have otherwise not been able to access.
The tighter credit policies of most bank lenders introduced since the GFC have made accessing your equity more difficult; however by using a professional Lending Specialist you can make the process far easier.
A good mortgage broker that is an active property investor can assist you to access your equity and provide you access to the lenders that will partner with you in fulfilling your investment goals.
When you are looking at property investment, one of the critical things to consider is not putting all of your eggs in one basket.
By using a number of different lenders, it may be far easier to acquire more properties faster.
Many people believe that having all of their loans with one lender can be beneficial for discount pricing and having access to a personal banker, however quite often it can also hamper your ability to borrow when you need to as well.
You also run the risk when having a large loan portfolio with one bank that it attracts unwarranted attention when the economy is affected by market forces outside the norms, which many people are testament to over the last two years.
A good personal banker is often promoted fairly quickly so there is no guarantee that you will have the same contact for long with your bank either, however with a good mortgage specialist you can build a long term relationship no matter which bank you lend through, and they can strategise with you to ensure that you are able to reach your goals as soon as you can.
Some of the benefits of spreading you loans and properties between lenders are as follows: It is easier to refinance single properties when additional equity is required for a new property purchase, as you do not have to move you entire portfolio.
You often have the ability to borrow more, as each lender has their own method of calculating your maximum borrowing amount, and this can vary greatly between lenders.
It is also easier in certain situations if a lender changes their serviceability calculators due to outside influences which ultimately reduces your borrowing ability with that lender.
If you have all of your loans and properties with that lender, it can prevent you to purchase an additional property when you know the timing if right to do so, or alternatively, if you want to refinance to a lender with a less restrictive policy, you need to refinance your entire portfolio instead of just one lender.
You will also have more potential to borrow through different ownership structures, as many lenders will not lend on the normal home loan rates for loans with company or trust structures, thereby restricting your ability to use these structures without the additional premiums of business bank facilities.
Certain lenders however are happy to lend to companies and trusts on a home loan basis, and a broker will always be able to guide you to the most appropriate lender for your individual needs.
In order to ensure your maximum lending ability is realised if and when you need to, there are a few things that need to be understood about banks and the way they evidence serviceability (your ability to afford the repayments) that can vary greatly between lenders.
Many lenders assess your existing loan commitments at a much more onerous repayment than you are currently making, which can make it very difficult to "service" your loan on their calculators, while others have a more realistic view of what your current commitments, resulting in a far higher borrowing ability with this lender.
A good Mortgage Professional will be able to guide you here to the most suitable lender if you are approaching the limits of your borrowing ability with certain lenders.
Credit card limits and personal loans can also greatly reduce your borrowing ability, and in certain situations you may not have any intention of using your credit card limit, however by simply reducing your limit, this can alter the outcome of your maximum loan amount considerably.
