Home Equity Loans

Home Equity Loans

House prices have risen rapidly in most parts of Australia, giving home owners and investors a readily available source of credit. A home equity loan allows the borrower to lend against the equity ion their home to either invest in shares, repay your debts, renovate, pay for lifestyle expenses or buy another property. The loan is secured by a mortgage over the property.

You can use your equity for any worthwhile purpose such as:

  • Renovate your home.
  • Consolidating your debts, such as credit cards or personal loans, into your home loan.
  • Investing in shares or managed funds.
  • Investing or purchasing another property.
  • Pay for a holiday, wedding or medical expenses.
  • Have funds available for planned leave
  • Buying a new car or boat.
  • Purchasing a business.

Alternative documentation equity loan

Alt doc home loans are designed for self-employed applicants who cannot prove their income via traditional documentation required. You can release equity with a alt doc loan for up to 60% of your property value. Releasing up to 100% of your property value is possible with a few select specialist lenders at a higher interest rate.

Things to be aware of

You can’t release equity that you don’t have: Equity is based on capital growth in your area. If you only purchased your home in the last year or two there may not be any equity value to be realised.

Line of Credit loans: Are not suitable for everyone. It is important to be extremely diligent and differentiate what is your money and what is borrowed funds. Some people are unable to differentiate and may end up spending beyond their means.

You should only have to consolidate debt once: If you find yourself needing to consolidate your debt more than once in your life then the problem can be your spending habits. Once you have completed a debt consolidation loan try not applying for more credit cards or personal loans. As you can get yourself further in debt.