Mortgage Application / Equity Release Questions
Discussion
Posted this on MSE but not had a response,so over to the PH masses!
Evening all - I'm a first time re-mortgager so apologies if this is basic stuff, but hopefully someone can help me out.
So, we bought a house in 2011 on a 2 year fix which ended in November last year. For one reason or other I am only now getting round to sorting a new deal, which I want to be a 5 year fix because we have our first child on the way so want the long term security.
As we stand, our LTV is around the 87% mark. I am confident that our house will have gone up significantly in value to around the £300k mark (we paid £265k) because of work we have had done, rising house prices in our area (BS9 - desirable location, schools etc) and what similar houses around us are selling for (closer to £350k).
On the assumption that our house has gone up in value to say £300k I want to take out some of the equity (approx £15k) for a business venture with my father next year, but only if it has gone up in value. I do not want our LTV to be below 85% when we take out a new deal! for obvious reasons.
I have spoken to our mortgage advisor about this and he has basically said, "no problem, that's how most people do equity release" but I can't quite get my head round what he has done with his Keyfacts figures. He has put down equity of £232000 (which is pretty accurate) and a property value of £300000 so an 80% LTV product. On the product he has come up with there are fees to be paid, so what happens if the valuation comes back below the £300k and we are not in the 80% LTV bracket? Will the lender just put us on their 5 year fix for the 80% LTV range? Same point applies for if the valuation comes back as what we bought it for? Will they just offer us their product in that range?
I suppose what I'm getting to is that I don't know what I want to do until the house has been valued!
As an aside, the product he has suggested was from Platform mortgages, and was by far the best rate, but our advisor seems to be trying to steer clear of them because of their service, or lack thereof! Anybody any experience or pointers with Platform?
Thanks in advance, and hopefully this makes sense!
Evening all - I'm a first time re-mortgager so apologies if this is basic stuff, but hopefully someone can help me out.
So, we bought a house in 2011 on a 2 year fix which ended in November last year. For one reason or other I am only now getting round to sorting a new deal, which I want to be a 5 year fix because we have our first child on the way so want the long term security.
As we stand, our LTV is around the 87% mark. I am confident that our house will have gone up significantly in value to around the £300k mark (we paid £265k) because of work we have had done, rising house prices in our area (BS9 - desirable location, schools etc) and what similar houses around us are selling for (closer to £350k).
On the assumption that our house has gone up in value to say £300k I want to take out some of the equity (approx £15k) for a business venture with my father next year, but only if it has gone up in value. I do not want our LTV to be below 85% when we take out a new deal! for obvious reasons.
I have spoken to our mortgage advisor about this and he has basically said, "no problem, that's how most people do equity release" but I can't quite get my head round what he has done with his Keyfacts figures. He has put down equity of £232000 (which is pretty accurate) and a property value of £300000 so an 80% LTV product. On the product he has come up with there are fees to be paid, so what happens if the valuation comes back below the £300k and we are not in the 80% LTV bracket? Will the lender just put us on their 5 year fix for the 80% LTV range? Same point applies for if the valuation comes back as what we bought it for? Will they just offer us their product in that range?
I suppose what I'm getting to is that I don't know what I want to do until the house has been valued!
As an aside, the product he has suggested was from Platform mortgages, and was by far the best rate, but our advisor seems to be trying to steer clear of them because of their service, or lack thereof! Anybody any experience or pointers with Platform?
Thanks in advance, and hopefully this makes sense!
Thanks Sarnie - to be fair he probably has explained it verbally and I've probably been too pre-occupied to digest it without seeing it written down.
So if we currently have £232k equity and the house was valued at £300k, we could release circa £23k and still be in the 85% bracket - is that correct?
When he first looked at the Platform rates they were quoting 12 working days which as we were remortgaging didn't seem too much of a problem seeing as the rates were so much better than elsewhere. That has since gone to 16 days and now 20 like you say. As time ticks on I'm worried about rates creeping up so have told him to find me something from a different provider tomorrow.
So if we currently have £232k equity and the house was valued at £300k, we could release circa £23k and still be in the 85% bracket - is that correct?
When he first looked at the Platform rates they were quoting 12 working days which as we were remortgaging didn't seem too much of a problem seeing as the rates were so much better than elsewhere. That has since gone to 16 days and now 20 like you say. As time ticks on I'm worried about rates creeping up so have told him to find me something from a different provider tomorrow.
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