Can you use the equity in your home for investment?
You May Have More Borrowing Capacity Than You Think
With the continued positive market outlook across most states, people are exploring how they can get into the housing market or purchase investment properties. The challenge arises when considering how to finance the purchase of a second property, particularly if you already have a mortgage on your existing home.
What Is Your Borrowing Capacity?
Housing prices have seen record increases across most states and suburbs in recent years, therefore many home owners will now have significantly more equity in their current home than they would have had two or more years ago. The increased value of your home may give you the capacity to borrow against it to purchase an additional investment property. Alternative options for finance may be to pool your resources by joining your borrowing power with close family and friends so that you can all enjoy what a buoyant property market has to offer.
Why Buy an Investment Property?
There are many reasons why you may want to purchase an additional property, whether it be as a straight property investment allowing you to gain a second income via rental return while enjoying potential capital increases in the property value, securing the future for your children by helping them buy their own home, or perhaps purchasing a safe home for extended family.
Recent housing affordability measures announced by both the Federal Government and some State Governments will assist first home buyers and some developers and encourage continued activity in the property market.
While home loan rates remain at record low levels, now may be the right time to review your current mortgage and home value to understand your own equity, or consider your options for additional borrowing for a second property either on your own or with other family members.
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