Discussion in 'Finance & Banking' started by voigtstr, 5th Sep, 2007.
Is the only way to pull out equity, to use a LOC?
Equity from what ? (perhaps I'll assume you meant "real estate" ... but either way, I'll move this thread to the "finance and banking" forum!)
No it's not the only way - you can refinance the loan with a new loan, or get a "top up" loan, or get a second non-LOC loan against the same property ... there's a few ways.
I use standard variable IO loans for my IPs ... so when I want to draw out accumulated equity, my first port of call (actually it's my broker who does the work), will try and see what kind of deal we can get with the existing lender to get an additional loan for the amount of equity (eg if the property has gone up in value $100K, we'll apply for an additional loan of $80K - so there are now two separate loan facilities with the same lender against the same property). More paperwork this way - but it's quicker and cheaper than refinancing. The additional loan I get is another standard variable IO loan.
If I can't do that for whatever reason, then we'll just look at refinancing with another lender who will play ball. Costs a bit more to completely refinance - and it takes longer to complete - but if it gets me access to more investable money, then it's (usually) worth it.
This isn't the only way (and may not be the best way for you) ... it's just how I do it.
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