How can I make the most of equity in my house as a 25yo?
Discussion
I'm currently 1 year into a 5 year fixed rate mortgage with Natwest. I have roughly £30-40k equity in my house having bought wisely.
Is there a way I can free up this cash to use to buy another property? Everything I have googled regarding equity release points me towards things aimed at over 55's.
I have tried calling Natwest to discuss with them but was on hold for 15 minutes! I think the ERC would be around 3%.
Just thinking out loud at the minute but any ideas or advice appreciated.
Is there a way I can free up this cash to use to buy another property? Everything I have googled regarding equity release points me towards things aimed at over 55's.
I have tried calling Natwest to discuss with them but was on hold for 15 minutes! I think the ERC would be around 3%.
Just thinking out loud at the minute but any ideas or advice appreciated.
Easiest way would be to remortgage for more and take the remaining money out i.e. if the house is £140k and you owe £100k get a mortgage for £120k but as you fixed for 5 years it is likely the early repayment penalties will be pretty high (this is an assumption btw only your bank or mortgage documents will be able to confirm).
Willber said:
Thanks - need to check the ERC but cant find details to hand.
Re. your explanation above, why would I remortgage for £120k and not £140k? Apologies if i'm being completely thick....
That would put your loan to value ratio up to 100% and then the rates on your re mortgage would be very high (if you could get a mortgage at that LTV)Re. your explanation above, why would I remortgage for £120k and not £140k? Apologies if i'm being completely thick....
Willber said:
I'm currently 1 year into a 5 year fixed rate mortgage with Natwest. I have roughly £30-40k equity in my house having bought wisely.
Is there a way I can free up this cash to use to buy another property? Everything I have googled regarding equity release points me towards things aimed at over 55's.
I have tried calling Natwest to discuss with them but was on hold for 15 minutes! I think the ERC would be around 3%.
Just thinking out loud at the minute but any ideas or advice appreciated.
Is that equity all you have to put into somewhere else?Is there a way I can free up this cash to use to buy another property? Everything I have googled regarding equity release points me towards things aimed at over 55's.
I have tried calling Natwest to discuss with them but was on hold for 15 minutes! I think the ERC would be around 3%.
Just thinking out loud at the minute but any ideas or advice appreciated.
What's your current property valued at? (approximately)
There's no way I would be considering another property unless I had very low LTV on my current property and/or a stack of cash to invest waiting in the bank....
The maximum you will be able to borrow will be 90% of your property's value AKA LTV.
Rate will be significantlt higher than your 12 month old 75% rate and you will incur ERC's of up to 5% of your balance if you redeem your mortgage, which is £5k for every £100k you owe.
In short, it can be done but it's an expensive way of doing it. The potential return of the investment would need to be significant to consider doing this if I was you.
If after all that you still want to do it, drop me a line
Rate will be significantlt higher than your 12 month old 75% rate and you will incur ERC's of up to 5% of your balance if you redeem your mortgage, which is £5k for every £100k you owe.
In short, it can be done but it's an expensive way of doing it. The potential return of the investment would need to be significant to consider doing this if I was you.
If after all that you still want to do it, drop me a line
Sarnie said:
The maximum you will be able to borrow will be 90% of your property's value AKA LTV.
Rate will be significantlt higher than your 12 month old 75% rate and you will incur ERC's of up to 5% of your balance if you redeem your mortgage, which is £5k for every £100k you owe.
In short, it can be done but it's an expensive way of doing it. The potential return of the investment would need to be significant to consider doing this if I was you.
If after all that you still want to do it, drop me a line
Im currently on a 90% LTV 5 year fixed, not a 75% deal, dont know if that makes any difference? But I completely take on board what you are saying! I might try speak to Natwest again today and see what they say.Rate will be significantlt higher than your 12 month old 75% rate and you will incur ERC's of up to 5% of your balance if you redeem your mortgage, which is £5k for every £100k you owe.
In short, it can be done but it's an expensive way of doing it. The potential return of the investment would need to be significant to consider doing this if I was you.
If after all that you still want to do it, drop me a line
Willber said:
Im currently on a 90% LTV 5 year fixed, not a 75% deal, dont know if that makes any difference? But I completely take on board what you are saying! I might try speak to Natwest again today and see what they say.
Sounds like you've been heavily overpaying then to get your LTV down to 75% in 12 months! 
Sarnie said:
Sounds like you've been heavily overpaying then to get your LTV down to 75% in 12 months!
I got it cheap! One opposite went up for sale for £25k more than I paid for mine and sold in a week, obviously I dont know how much for but I assume £5k less than asking, others have gone for around that price too.I might just call into Natwest or go see my original broker to clear things up and find out exactly what, if anything, I can do to make the most of my position.
Thanks for all the advice.
Willber said:
LTV is 75% currently. Just thinking out loud as I said, absolutely nothing set in stone.
Just trying to get an idea of how/if I can make the equity work for something else. There is a possible option of investment into a new commercial building.
It might be boring, but why are you trying to speculate on the small amount of equity you have? why not use your house to live in and pay down the mortgage.Just trying to get an idea of how/if I can make the equity work for something else. There is a possible option of investment into a new commercial building.
GrizzlyBear said:
Willber said:
LTV is 75% currently. Just thinking out loud as I said, absolutely nothing set in stone.
Just trying to get an idea of how/if I can make the equity work for something else. There is a possible option of investment into a new commercial building.
It might be boring, but why are you trying to speculate on the small amount of equity you have? why not use your house to live in and pay down the mortgage.Just trying to get an idea of how/if I can make the equity work for something else. There is a possible option of investment into a new commercial building.
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