With the rise in property values throughout Australia over the last few years, many people are now looking to access equity held in their homes.
At One Financial we can look to help you release that equity, to enable you to;
- renovate your existing property
- purchase a new investment property
- consolidate other debts
- purchase a new business
- allow you to go on the holiday of a lifetime.
One of the downsides of the rapid rise in house prices is the fact that it is becoming more difficult for young couples to save the deposit required to purchase their first home.
Many parents have properties with little or no mortgage against them. A rewarding way of using this equity is to release a sufficient portion of it for your children to use as a deposit on their own home purchase.
If we consider the following example, we can see how this can benefit the children whilst not over exposing the parents.
Example
Jack and Jill are newlyweds looking to purchase their first home in Sydney valued at around $350,000. Although both work, they are having trouble saving a deposit for the property and only have around $10,000 in savings. They do qualify for the governments First Home Owner Grant of $7,000, but the banks and other lenders are still unwilling to lend them the rest of the money as they do not have a large enough deposit saved.
Jack’s parents however, have a property valued at $400,000 which is currently unencumbered. We can structure borrowings to the parents enabling them to gift the deposit needed by Jack and Jill. This method limits the parent’s exposure to just the amount of the loan obtained on their property rather than as guarantors where they are exposed to the total loan secured against both properties.
Reverse Mortgage
A reverse mortgage enables older homeowners (60+) to convert part of the equity in their homes into tax-free income without having to sell the home, give up title, or take on a new monthly mortgage payment.
The reverse mortgage is aptly named because the payment stream is “reversed.” Instead of making monthly payments to a lender, as with a regular mortgage, a lender makes payments to you.
For more information or if you would like to speak with one of our loan consultants call us on 1300 551 695. Alternatively if you would like us to call you, please complete the enquiry form.
Why so many Australians have already turned to One Financial
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