It’s super important to understand how equity can help you leverage your portfolio. Unlocking the equity in your home is a great option if you’re thinking about purchasing an investment property as it could help with a deposit for another purchase.

Using equity to build property portfolio

To work out how much equity you have in your property, you’ll need to subtract any debt remaining on your mortgage from the property’s overall value. So, if your property’s worth $700,000, and you have $500,000 left on your mortgage, then your equity is $200,000.

But it’s not quite that simple when it comes to accessing that equity through your lender. They’ll send a valuer out to your property, and the figure they come up with may not match up to what you think its actual market value is.

Your property’s equity will increase both as you pay off your mortgage and as the property’s value increases. So, if your $700,000 property increases in value by 10% over 12 months that’s an extra $70,000 in equity. Add to this any deduction to the mortgage gained through repayments, and your equity has significantly increased over the year.

So how do use equity to build property portfolio? How can you make good financial decisions that impact your portfolio? Well that’s what I am going to tell you about in this two minute video. Click the video below:

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