Has anyone actually used the equity in their current home to buy another house???
We are looking to upgrade to a bigger house and are thinking of keeping our existing place as an investment and we would have to use the equity in the current place to help finance the new place (although we do have some savings to use as well - not enough to cover deposit and stamp duty tho!).
My question is how does using "equity" actually work???? ie do we need to draw the equity on the current loan (thereby increasing our current loan) to pay for the deposit and stamp duty on the next place or does the existing loan stay the same and the bank lends us 100% of the purchase price of the next house.
I know I could ring the bank but I find that I am on the phone for hours and they pass me from one person/department to the next as one single person can't seem to answer all my questions.
We would obviously like for the "new" loan to be as small as possible and the current loan (for the potential investment property) can be maxed out if necessary, so would simply refinancing be the way to go?
If anyone has any experience in this area, your advice/knowledge would be greatly apprecitated.
Thanks for your time.