Turn your Home Equity Loans into a Solid Investment
Posted: Jun 29, 2018
Turn your Home Equity Loans into a Solid Investment
Learn how to use home equity loans to build wealth by reading the tips below.
The recent annual global survey conducted by the Association of Foreign Investors in Real Estate names Australia as one of the most stable countries in the world to invest in real estate. A BIS Oxford Economics senior manager says that it is because many investors are seeing robust price growth in most property classes and it has successfully avoided recession for more than 2 decades. The country also lures foreign investments because of its political and economic stability, and investors sees a "strong potential for growth.
What does it mean for average consumers and home owners?
Home equity loans are one of the most practical options to generate cash for immediate use in Australia. As the real estate market grows, the pricing of houses also increase. Real estate is also one of the assets which are not affected by inflation. In fact, if you are renting out your reports you can simply increase the rent and you will earn more income in the process. When applying for a loan, you will not be required to disclose the purpose of your loan and you can sue the borrowed amount in any way you want to. That gives you enough freedom to use the money not only for emergency medical and car repair needs, but also for renovations that could increase the value of your property.
There are many people who took out huge mortgages only to lose their homes in foreclosure. It is because some of them did not look into the benefits of applying for second mortgage using the equity they built overtime.
If you did not participate in a mortgage fraud – then, you should not settle for foreclosure. By using your home equity, you can avoid losing your home because of extenuating circumstances that hinder you from making timely mortgage payments.
Sudden job loss, medical emergency, death in the family and divorce are common situations that can lead to foreclosure. Other people cannot make payments on time because of excessive debt obligations and reduced income probably due to job demotion, business loses or simple inability to pay adjustable interest rates.
By applying for a home equity loan you can make up your payments and the lenders may agree to wait for a certain period of time before they take a legal action against you. Negotiate with your lenders to give you an affordable repayment plan or forbearance. If you abide by the agreement, the mortgage company and your third party lenders may forgive a payment or two depending on the debt forgiveness agreement.
You can also apply for second mortgage which will pay off your existing mortgage, and possibly consolidate all your loans. You can save money each month on repayments by spreading the payments over a longer term. Let’s say, your original mortgage is $1200 a month, you can lengthen the loan period so you only need to pay $1000 a month. But, you also have the option to shorten the loan period and save money on the overall interest rates and fees. So, instead of paying $1200 a month, you can add another hundred dollars to spread the payments over a shorter term.
By changing the terms of the mortgage the lender might reduce the interest rates or the monthly dues. Just make sure that you read the terms and study the overall loan cost before signing your contract.
Boost home value
Not all improvements need to be cosmetic especially if you don’t have plans of selling anytime soon. If you want to make the most value out of your equity loan, you can make practical home improvements to add thousands of dollars on your home value. You can start by inviting a relator who will make an actual valuation of your home. They can give you suggestions on how improve the look of your home and at the same time, provide timely opinions whether an improvement simply adds to the home’s aesthetic value or to its intrinsic value.
You can hire an inspector to discover hidden problems like termite infestation, water leak, drainage problems and electricity damages that could negatively impact the value of your house.
It is also advisable to declutter, do deep cleaning and freshen up the look of your home not only to make it more appealing, but to make it habitable, for your own comfort.
Increase cash flow
If you don’t want to lose money on your home, and to recoup the mortgage fees each month, why not rent out your home or a part of it? It is always one of the best ways to rise out the market, especially when it is not the best time to sell. So, if you are facing an unusual financial circumstance like health emergency, job loss and house repair needs, you can apply for home equity loan, and recover your losses by renting a portion of your house.
Furthermore, you can take advantage of tax deductions for rental losses. You also have the option to stay in your home or to move to another property, whichever works for you.
Take advantage of the booming real estate in Australia by applying for home equity loans today on
Australian Lending Centre have provided a broad range of financial solutions for Australians since more than 20 years. For more information visit https://australianlendingcentre.com.au