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Last updated on November 20th, 2020 at 10:32 am
If you have ever considered buying a second home, you might be thinking it is out of your reach. However, plenty of people in Victoria are buying their second home with little to no deposit thanks to the equity generated from your principal place of residence.
If you’re interested in finding out more about home equity, what can you use it for and the benefits of purchasing your second home using equity we’ve gathered the essential information on how you can tap into this exciting property investment option, without the need for loads of cash savings.
Accessing equity from your home in Victoria is a great strategy to buy a second property and boost your property portfolio.
A popular way to access the equity in your home is to refinance your home loan, gaining access to the equity or value you have built up in your home to invest in a range of investments including buying a second home.
Many people purchase vehicles, purchase shares, invest in renovations in their existing home amongst other things, however, one of the most effective investments for your home equity is investing in a second home.
To find out home much home equity you can access, you can ask your finance broker or mortgage broker to work out the estimated value of your existing home, deduct your current loan and you will be left with an approximate equity figure which is often called a loan to value ratio or LVR.
Your home equity often increases as the market value of your home increases and the mortgage debt decreases, providing a fantastic way to invest in an investment property without the need for savings.
Additional benefits of home equity include:
Refinancing and taking equity out of your home will allow you to purchase a property and start your path as a property investor
Accessing your equity and refinancing while interest rates are low can mean you will pay less for your mortgage while building your property portfolio.
A fantastic way to build wealth for your retirement or for the future is via passive income. Buying your second home with equity is an effective way for investors to generate income through a rental property.
There are plenty of benefits for using equity to purchase a second home, from saving on your interest rate to building a nest egg for future generations.
If you’re interested in finding out more about how to buy second home using your existing home equity or you would like to find out more about the process, the friendly team from Achieve Homes are here to walk you through the process and provide the essential information.
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