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equity of my property for investment?

1. what is equity of my living property? 2. how to use it for property investment?

Public Comments

1. It depends on where you live - laws in various countries are different. If you are in Canada - you should read a book called "The Smith Manoeuver" by Fraser Smith. http://www.smithman.net . If you are in another country, you should speak with a REPUTABLE financial planner. Basically, your equity in your home is the value of your home minus what you owe on it (your mortgage). To invest this properly, you need to speak with someone.
2. The equity in the property you are living in can be calculated by getting the value of the property and deducting any loans outstanding against it. For example if your home was worth $500,000 and you owed $100,000 then you would have $400,000 worth of equity. In Australia you can easily access up to 80% of the value of your property and up to 95% if you are willing to pay a fee for the higher risk (known as lenders mortgage insurance or LMI for short). So in the above example the person could access $300,000 of their equity ($500,000 x 80% - $100,000). This money released can then be used as a deposit to buy another property using a separate loan. Again to avoid LMI you would need to borrow less than 80% of the property value. Taking into account that stamp duty, conveyancers costs and other fees usually add up to 5% of the property value, you would need to have 25% of the purchase price available.