Home equity how dos it work?

My partner bought a small unit about 8 months ago we wont to buy a home, but we would like to keep the unit as investment and let the rent pay it off or at lest take some of the weight of us . My partner tuck out a loan for 135k, and that was pushing us to braking point . We have paid of $7k off the loan . The unit value has gone up by ruffle $25k and will go up at lest another $10k as we are doing it up . We can not sell the unit for another 4 months as it was my partner's first home, and must live in it a full 1 year. The house we would like to buy will cost us $300k.Could we afford to keep the unit, and not sell it as well as buy the house?

HE! And its a governmental requirement in QLD Australia that a new home owner must live in there home one full year before selling it.

The equation is as follows:

Current market value (CMV) - Property debt = Equity

To explain it better, if a property's value increases, a sale could bring in more $$ than the owner paid, creating a long-term gain. Second, as the total mortgage debt is reduced through monthly payments, the owner's actual ownership interest in the property increases. This increasing ownership interest is called equity and represents the paid-off share of the property held free of any mortgage. A homeowner's mortgage payments build equity and so increase net worth. Equity also builds when the property's value rises through area appreciation. To put it simple, equity is the interest or value that an owner has in property over and above any indebtedness. You could refi and take out the equity (I would suggest a line of credit -- you only pay back the portion that is used). Somethings to think about......will you be able to pay a second mortgage on the first unit along with a third mortgage on your new home? Is the first unit supporting itself? Be very careful with your decision.

Hope this is helpful!

sale value of house, minus what you owe= equity. who told you she can't sell for a year?

You probably don't want to sell your home until you've lived in it for a certain amount of time. It depends on your state but I know if MO if you live in a home for 2 years you don't pay capital gains tax on your profit.
My husband and I were recently in a similar situation. We sat down with someone from our bank who ran all the number and figured approximately what our payments would be if we bought a new home for a certain price. The amount of profit you make when you sell plus anything you have saved will be how much your down payment can be. Then your bank can tell you what your payments will be based on the interest rate.

You can sell any time you want - you might be thinking about the rule that states that if you sell a residence without having lived in it (I thought it was 2 years) it is not seen as a residence - tax wise - and you pay capital gains on any profit.
From what you said, I doubt that you could afford to keep the original unit. If a loan for $135 K was breaking you, then how in the world do you think you could qualify for a loan almost three times that? In addition, you need to not only be able to pay the mortgage - but eat, decorate - pay the utilities - and anything else your life entails.

It sounds like a not easy cracking nut,have a look here,you should find something useful for you.http://homeloan.online-assistant.info/fe...