Time and again, I receive the frantic phone call from a client who has found a property, had their offer accepted and needs to arrange finance in a hurry. This is usually not an issue – except when they also needs to access equity in another property to get the deal done.
BY JAMIE MOORE
In a perfect world, we’d have already accessed equity for the client so they had the funds available to them to cover the deposit. This saves a lot of time and stress.
For anyone serious about investing, it’s a good idea to access equity when you don’t need it. Here are some reasons why.
First and foremost, if a good deal presents itself you want to be in a position to act quickly. Having already accessed the equity to fund the deposit usually means a quicker finance approval time because most of the hard work has been done.
Also, it can often take anywhere up to four to eight weeks for the equity release to be complete – sooner if it’s an internal refinance with your current lender but longer if it’s an external refinance to another lender.
From time to time, a lender’s policy may change. Your current lender may not have an issue with you accessing equity today but tomorrow their policy could suddenly be less conducive to your needs.
And finally, if setup correctly, you can have the funds sitting dormant with no interest to repay until you actually start to use them.
All in all, for proactive investors who always have an eye out for their next property, having easy access to equity is a must.
Jamie Moore is the owner of Pass Go Home Loans, a mortgage broker firm specialising in sourcing and correctly structuring finances for property investors across the country.
This information is of a general nature only and does not constitute professional advice. You must seek professional advice in relation to your particular circumstances before acting.