The banks are cautious when approving equity loans,unless there is a good explanation of where the funds would be used.
The majority of lenders have a “cash out policy” which restricts the amount of money that you can release to as little as $10,000 to $40,000. Small lender have less cash out restrictions.
We are credit experts and specialize in helping customers to release their equity in a responsible way.

What can I use my equity for?

The equity can be used  for any purpose such as:

Are equity Loan worth having?

The knowledge of money management can help you use this loan effectively. Some people who apply for home equity loans end up spending the money on lifestyle expenses rather than generating income and it becomes harder to repay back without a plan.
It is an affordable step to release equity up to 80% LVR (80% of your property value).  Some  lenders can even  allow you to release up to 90% LVR while you have to pay a once off LMI premium. You must refinance your existing loan as part of the equity loan application.

Is a Line of Credit the best option?

The lenders prefer providing a Line of Credit (LOC) as the interest rate is higher compared to a standard home loan.
In comparison, a 100% offset home loan makes it cheaper and it is easier to manage as well. You can keep your available funds either in redraw in the home loan or in the offset account which allows you to separate your day to day spending from your available equity.

Consolidating debt

One of the most common reasons that people release their home equity is to roll all of their expensive unsecured debts into one low monthly repayment.
The interest rate on credit cards ranges from 10% to 30%, and for personal loans the rate can be anywhere from 7% to 16%.
By consolidating these debts into your home loan you can significantly reduce the ongoing repayments and save a small fortune in interest. So debt consolidation can be useful.
The recent repayment history with current lenders will be taken in consideration before a lender provide you the funds.

Proving the purpose of your loan

The purpose of your loan is important for your application to go through. Some lenders have specialization for providing loans for various categories. Some examples of the evidence you may need to provide are:

Low doc equity loan

Releasing your equity with a low doc loan is particularly difficult as lenders  struggle for evidence of your income.
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.

Interest rates & fees

Why pay higher interest rate for a home equity loan when we can help you to providing various options.  Some banks tend to overcharge for Line of Credit loans and also to be very strict in their approval criteria.
By preparing documents according to the needs, we will provide you the best comparison on available professional packages, basic loans and line of credit loans available to ensure you get the lowest possible rate and fees.

Low doc options

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% to 70% of the property value.
For more information see our low doc home loans section, our alternative income verification page, or enquire online. Our team will help you find a great lender and competitive loan package.

Tips for your equity loan

Beware of Line of Credit loans: Because you can access your equity via any ATM, it can become increasingly difficult to spend responsibly. If you feel that this may cause you future financial problems, then consider a 100% offset home loan instead.
Don’t make it habit: If you need to consolidate debt more than once in your life then you may need to improve the spending habits or undergo an money management.

The employment and age factor is very important. some people continue to borrow to fund their lifestyle all their life and retire with mortgage on them.
Right time for equity : If you only purchased your home recently then it is unlikely that you have any equity to release. It is better to wait for few years and be stable with the payments before you think about it. You can calculate how much equity you have on our home equity page.