Using the Equity in my Home

Real Estate Planning with Anna Manning

You may be surprised that you can use the ‘equity’ in your home to help fund the purchase of an investment property.

This is particularly the case in a housing market where property values are rising strongly.

The more an owner occupier property increases in value the greater the ‘equity’ an investor can use as security to purchase an investment property.

For example, if you own a home worth $250,000 and the value of the property increases by $25,000, then this additional $25,000 equity can be used as security, together with the existing equity of $250,000 as security, to purchase an investment property.

A key point to remember when considering buying an investment property, using the equity in your home, is that you will need to consult the bank to confirm how much equity is required in order to purchase an investment property.

Because most investors have much higher levels of home equity, they could be in a position to purchase a number of investment properties.

Anna Manning is a Real Estate Agent at Leaders Real Estate Lower Hutt.
p 027 569 2749 e anna@huttrealestateagent.co.nz

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