Note: Due to the COVID-19 pandemic, lending criteria have changed. Please contact us for more details.
What is an equity loan?
The term ‘equity’ simply refers to the difference between the amount you owe on a mortgage and the value of your home.
A home equity loan is characterised by its flexibility and ease of use, allowing you to use the equity you have built up in your home as collateral security.
This type of loan can be used to purchase another property, for renovation purposes, to refinance your mortgage or to invest in shares.
Why do banks see equity releases as a problem?
All lenders have cash out restrictions and the major banks in particular are extremely cautious with the maximum amount of cash you can take out.
This is because the banks know that equity releases are approximately 2.4 times more risky than a normal loan to purchase a home.
For this reason the banks investigate what you will be doing with the money and have stricter guidelines for loan approval.
Which lenders do equity mortgages?
Equity loans can be financed through the major banks however this type of mortgage can be processed through the non-conforming and specialist lenders who are not as strict when it comes to releasing equity.
Please call us on 1300 889 743 or enquire online to speak to a mortgage broker who can help you find the best lender who will get your equity loan application approved.
What types of cash loans are available?
There are two main types of equity loans in Australia:
- The lump sum cash type: This is where you get a lump sum for an investment or particular project and start paying interest immediately.
- The Line of Credit: You only pay interest on the part of the loan that you have drawn down on.
However, you can refinance your entire loan to access the equity that has been built up on your home. Please enquire online to find out how this can work for you!
How can I benefit from equity finance?
Many Australians spend years saving up thousands of dollars to make a deposit for renovation purposes or to buy an investment property. Saving up for enough funds to complete the transaction may be a difficult task especially if all of life’s ongoing living expenses are taken into consideration.
Wouldn’t you agree that it would be more convenient if the process to renovate your home or to buy a new property was more flexible?
By using an equity loan you can start renovations on your home or purchase an investment property sooner. This will save you the hassle of providing the banks with a deposit that you would have saved up over several years. However it is important to remember that all debts need to be carefully managed in order to maximise investment returns and minimise risks.
Apply for an Equity Loan now!
Buying your own home is likely to be your biggest asset and would probably be the biggest investment you’ll ever make. Why not put this asset to work by taking out a home equity loan?
Please enquire online or call us on 1300 889 743 to get started today!