Using the equity in your home to create wealth is nothing new, as financial consultant Troy Green explains.
Many homeowners on the Northern Beaches are living in houses worth millions of dollars with mortgages often less than 50% of the home value.
Their current plan is to take the profit, when they reach the point of downsizing, and potentially put this towards their retirement funds.
But Troy Green, founder of Adgreen, says the equity can be used now to start making money for later and it can really come at no additional cost.
“In the last six years, many properties in this area have doubled but people really don’t understand the best way to use this,” he adds.
To calculate the equity in your home, you take 80 per cent of the value, minus your current loan amount. Troy says that amount leaves many people with the option of using this money for an investment property.
“Most of my clients have two to three investment properties and they haven’t had to outlay any additional money, they have used the equity in their homes. Accountants recommend this path for investing as the most tax effective method,” explains Troy.
He is able to organise free bank valuations of your property and assess what equity you have in your home, completely free of charge. “We can also look at your existing mortgage rate. We find that 90 per cent of people we meet we refinance to a much sharper rate,” adds Troy.
Troy and his staff can organise the whole process from start to finish. A finance broker and a licenced investment buyer’s agent rolled into one service for busy clients.
“It’s about finding the right property at the right price and doing all your due diligence,” he adds. Troy really likes Newcastle and has been assisting clients buy in the area for more than six years.
“We evaluate what you have to spend, make sure it fits into your budget, find the right property, negotiate the price and manage the whole thing for you… we even find you a tenant!” he explains.
Another issue he is happy to tackle for homeowners now, is the fact that many are on incredibly high interest only (I.O) rate loans. He believes Principal and Interest (P&I) loans are becoming increasingly attractive as they are often 0.50-1.00% lower than the I.O offerings. And people can start paying off the debt as well as the interest.
The equity can also, subject to lender approval, be used to diversify into other investment types such as managed funds and equities, to purchase a car or consolidate credit cards and personal loans and as a gift to family so that they can use the funds to help them into their first home.
Adgreen can now organise car and equipment finance and has an in-house financial adviser to consider your complete financial situation.