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130. Equity to Invest
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Welcome back to another episode of the 360 Money Matters Podcast!
In this episode, we discussed equity in property, focusing on its calculation, utilization, and implications. We explained equity as the difference between the property value and the debt owed, influencing the loan-to-value ratio (LVR). An LVR above 80% may incur mortgage insurance costs due to increased risk for banks. Utilizing equity can enable diversification into other assets or properties to further expand your wealth creation.
Another key point highlighted was structuring loans to ensure tax deductibility based on the fund's purpose. The debt recycling strategy was introduced as a powerful method to convert non-deductible debt into deductible by investing strategically with borrowed funds from existing equity. This approach involves building an investment portfolio that generates income to pay down non-deductible debts over time.
Join us and learn how to leverage your property equity effectively and make informed financial decisions. Hit the play button now!
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This podcast contains information that is general in nature. It does not take into account the objectives, financial situation, or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This information is provided by Billy Amiridis & Andrew Nicolaou of 360 Financial Strategists Pty Ltd, authorized representatives and credit representatives of AMP Financial Planning – AFSL 232706
Episode Highlights
Understanding equity in property
About loan-to-value ratio and equity calculation
Considerations when taking out equity and investing it in other assets
Assessing serviceability and tax considerations
Debt recycling as a powerful strategy
Having an exit strategy and risk mitigation plan
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