EQUITY FINANCE MORTGAGE

Equity Finance Mortgages are still quite new to the Australian housing market, but basically this is where a financier will put up a deposit of 20% of the value of your house, and so 20% of your house will belong to that financier.

What are the benefits of an Equity Finance Mortgage, well for one there no repayments on the equity finance portion of the debt. If this is a 20% Equity Finance mortgage, then that will reduce your repayments by 20%.

This will allow you to live in a champagne lifestyle, even though you may only have a beer budget. For example if you could afford payments on a $400,000 house, for the same monthly repayments you could be living in a $500,000 house with a resultant upgrade of style and appointments. Alternatively it may allow you to live in a better suburb, or closer to work saving in time and transport costs. We all know that when real estate goes up in value, the inner city suburbs fair much better in capital gain terms.

Note that you do need a deposit of 5% and a clean credit history.

These loans are only available for cities and major centres.

How do I repay my Equity Finance Mortgage - That is done when you sell or refinance your home. That is the time when the financier of the equity mortgage portion collects the outstanding debt plus a percentage of the profit that you have made on the property. This is a more complex style of finance than traditional finance so it is very important that you understand how this will affect you. Ask us to explain all of the aspects of this loan.

Interested? Apply Now and tick the Equity Finance Mortgage option on the application form.