Equity

Man 1: Most of us have heard the term equity, but who really understands it & how it can be used to build wealth or improve your lifestyle. At ANZ we are taking the mystery out of Equity, making it straight forward & easy to understand. Taking the mystery out of Equity is the first in a series of interviews with ANZ specialists where we will discuss home lending & property investment. Its really not as complicated as you may think.

Woman: Equity, it’s the new buzz word. IT seems everyone wants to know what it is, how to unlock it & more importantly how to put it to work. Michael Rowland, managing director of ANZ mortgages has more than 20 years experience in financial services. He’s in the studio today to talk equity. Michael how are you?

Michael: Very well thanks

Woman: Michael we have had a lot of listeners emailing us about Equity. They want to know what it is, how you access it, how it can be used to build wealth & how it can enhance your lifestyle. The big question Michael is what is Equity?

Michael: Yeah, some people think Equity is a complex topic but it’s relatively simple. Equity just means the difference between the value of your property & the amount that you borrowed. So for example, if you had a property worth $300,000 with a borrowing of $100,000, your Equity would be $200,000.

Woman: Where does Equity come from?

Michael: Equity comes from two main places, you might be surprised to realise how much equity you actually have in your property as property prices have increased over time. Equity also comes from the situation where you repay the borrowings on your home

Woman: Michael what can you use Equity for?

Michael: The two main uses of Equity are to invest in property or to invest in other valuable assets like shares & investments in managed funds.

Woman: Can you use it for other things?

Michael: You can use it for a lot of other worthwhile purposes, for renovations, for school fees, for other lifestyle purposes like holidays or motor vehicles

Woman: Are there limits on what you can use your Equity for?

Michael: No, Equity is there really for all worthwhile purposes but it is important to remember that Equity should only be used to borrow where you are comfortable with the amount your borrowing & that you are able to repay it.

Woman: What if you’re still paying off a home loan?

Michael: If you’re still paying off a home loan provided you have the ability & comfort to repay you can use Equity for further borrowing up to the agreed limit. In some cases you may wish to get independent financial advice.

Woman: Michael is there any ANZ product that is specifically designed for this purpose?

Michael: Yes, ANZ has an equity manager product which provides great flexibility in borrowing against the equity in your home. It provides full transaction capability as well as providing an overall limit that you can borrow against depending on your needs.

Woman: Is it a home loan or a transaction account?

Michael: Its both, it provides great flexibility. It allows people for example to deposit there salary & other amounts they may receive & then borrow & draw down against those amounts for whatever purpose they may like.

Woman: We all know circumstances change as our lives change, is this loan going to change with me?

Michael: Yes this provides the ultimate flexibility in moving with your own personal circumstances.

Woman: Choosing a loan & a lender is a big decision, how do I make that choice?

Michael: You make that choice by being comfortable with the bank you’re dealing with & for example ANZ is Australia’s most awarded home lender & we have won many industry awards

Woman: How important are awards in helping me make that choice?

Michael: Awards are important as they provide people with an independent view on of the products provided & a comparison against other lenders products.

Woman: so someone has done the hard work for you

Michael: They certainly have.

Woman: Michael where do I find more information about Equity manger?

Michael: You can go into any ANZ branch, call us, go online & if you are particularly interested in the ANZ Equity product go to www.anzequityexplorer.com

Woman: A little bird has told me that if I go onto that site I will find a calculator that can tell me exactly how much equity I have in my home

Michael: Yes, there is a simple calculator on that website that will show you exactly how much equity you have in your home & 7what you can do with it.

Woman: Many thanks Michael, I think you have helped de-mystify Equity & explained that it’s not nearly as complex as many people think.

Michael: Thank you