Regearing

Home Mortgage Refinance Loan- no money down

                                       Refinancing/Regearing

As property appreciates the unrealised gains build up is known as equity. In some
countries this equity can be use for the purchase of another property without having to
come out with further cash; commonly known as "no money down" investment.

e.g.
               Property A, purchase price                $400,000
               Loan 75%                                          $300,000
               Down payment                                   $100,000

Property A appreciates over the next 5 years by 40% to a value of $560,000
The unrealised gains of $128,000 ($560,000-$400,000 X 80%) can be used
to purchase another property, B.

               Property B, purchase price                $560,000
               Required down payment, 20%           $112,000

The bank will grant the buyer of property B on account that he owns property A
$128,000 in credit for the purchase of property B; assuming at a rate of 80% of
  the equity build up (80% X $160,000 ). The buyer has an extra $16,000 to pay for
    incidental cost involve in the purchase. The process is repeated for subsequent
     property purchases till an entire property portfolio is built up.

Banking policies varies from country to country, in Singapore such banking practise do
not exist. In Australia the banks are more liberal and such practise proliferate among
investors.