➖ NEGATIVE EQUITY
This is when the value of your home drops BELOW what you owe the bank. If you needed to sell the house immediately, you'd still owe the bank money.
WHY is it important to understand?
--> It's a problem if you need to sell the house right now.
--> It's also a problem as you'll be unable to refinance to another lender.
LONG TERM? Two things will likely happen naturally:
1️⃣ The value of your property should increase; and
2️⃣ You will pay down the balance of your loan.
And then you'll be earning real equity again.
❗ Did you know ❗
20+ years ago, when I started banking, we could lend home buyers up to 107% of the value of the home! It's possible to replicate this, but requires multiple lender structure and thorough risk assessment.
It's important to seek proper advice from an experienced broker who has been around for decades - understanding the highs AND the lows.
Truly's advice, financial services and property strategies are complimentary. We do this for the best interests of our clients and we relentlessly strive to serve as the best mortgage brokers in Australia with uncommon excellence!
James Brett. Principal Mortgage Broker ☎️ 0439 591 759
Victor Simone. Principal Mortgage Broker ☎️ 0449 659 029
Nermalee Bowe. Senior Mortgage Broker ☎️ 0431 274 554
Dragan Disljenkovic. BD & Relationship Manager ☎️ 0422 435 900
Credit Representative Numbers 521733, 550284 & 547037 are authorised under Australian Credit Licence 389328
