Home equity loans

HomeHome equity loans

Home equity loans

A home equity loan allows you to borrow against the equity you have in your 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 your home and in most cases you can use as little or as much of the loan, if and when you need it. Equity loans have been very popular in recent years, due to their flexibility.

House prices have risen rapidly across most of Australia, giving home owners a readily available and inexpensive source of credit.

What can I use my equity for?

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

  • Buying another property.
  • Buying a business or investing in your business.
  • Investing in stocks, shares or managed funds.
  • Consolidating your debts, such as credit cards or personal loans, into your home loan.
  • Buying a new car or boat.
  • Renovating your home.
  • Helping to pay for a holiday, wedding or medical expenses.
  • To keep funds on standby for when you take maternity leave.

The loan cannot be used for illegal purposes, Contact us or enquire online if you are not sure if your loan purpose will be accepted.

What can I use my equity for?

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

  • Buying another property.
  • Buying a business or investing in your business.
  • Investing in stocks, shares or managed funds.
  • Consolidating your debts, such as credit cards or personal loans, into your home loan.
  • Buying a new car or boat.
  • Renovating your home.
  • Helping to pay for a holiday, wedding or medical expenses.
  • To keep funds on standby for when you take maternity leave.

The loan cannot be used for illegal purposes, Contact us or enquire online if you are not sure if your loan purpose will be accepted.

Proving the purpose of your loan to your bank

As part of the application process you may need to prove the purpose of your loan. This requirement varies depending on the lender you choose, the amount you need and the purpose of your loan. Some examples of the evidence you may need to provide are:

  • Buying shares: An accountant’s letter, copy of a plan or statement of advice from a financial planner.
  • Buying a property: A letter from your conveyancer confirming you are looking for a property or a copy of the contract of sale when a property is found.
  • Debt consolidation: One recent statement for each of your debts that are being repaid.
  • Renovations: A copy of the building contract or quotes from the contractors that you are using.

Will this be a problem for you? If yes, please speak to an SHL broker today, as we can help you to apply with a lender who does not require extensive evidence of the purpose of your loan.

Low doc equity loans

Releasing your equity with a low doc loan is particularly difficult as lenders do not have evidence of your income or what you are doing with the loan funds.

You can release equity with a low doc loan for up to 60% of your property value. Releasing up to 80% is possible with a few select specialist lenders at a higher interest rate.

Most lenders these days will not require you to submit tax returns or financials if you sign a declaration confirming your income.

The lender can then assess your loan using the declared income.

Although most lenders do not charge a higher rate for low doc loans they may charge you Lenders Mortgage Insurance (LMI) as a one off fee when the loan is set up.

This fee is usually charged for loans over 60% of the property value.

Applying for a home equity loan

If you are looking to releasing some equity in your property, for further investment or something else

Get in contact with Solution Home Loans to discuss ways on how we can help you release your equity in your property.

We can work out which lenders will approve cash out for your situation and then help you to compare the best loans available.

Contact Solution Home Loans today, for a free financial health check.