How do I release 'Equity' from my house

[d33p]

Hi Folks

I have approx £150K equity in my house i.e. current value minus outstanding mortgage, ultimately i'd like to release this cash so that I can invest in other properties or a business.

My current mortgage company won't even give me £10K for a 'home imnprovement' loan as they reckon I'm borderline on the affordability of repaying the current loan.

Anyone here have any suggestions on how I should approach this, are there specialists financial consultants that I can approach, a friend of mine mentioned getting a second charge on my house but I didn't fully get what he meant by this.

Any advice would be greatly appreciated. Thanks in advance

[jacobyte]

Look at remortgaging. I did this last year when I needed a large amount for an MBO. It's also an opportunity to shop around to for a better rate.

Minimax will no doubt be along soon to shed more light.

[wanty1974]

Hmmm... affordability calculations may restrict your options as more and more lenders are using this in the assessment rather than the traditional salary multiple.

I would talk to an IFA.

[minimax]

d33p said:

Hi Folks

I have approx £150K equity in my house i.e. current value minus outstanding mortgage, ultimately i'd like to release this cash so that I can invest in other properties or a business.

My current mortgage company won't even give me £10K for a 'home imnprovement' loan as they reckon I'm borderline on the affordability of repaying the current loan.

Anyone here have any suggestions on how I should approach this, are there specialists financial consultants that I can approach, a friend of mine mentioned getting a second charge on my house but I didn't fully get what he meant by this.

Any advice would be greatly appreciated. Thanks in advance

YHM

[minimax]

wanty1974 said:

Hmmm... affordability calculations may restrict your options as more and more lenders are using this in the assessment rather than the traditional salary multiple.

I would talk to an IFA.

well now, this is swings and roundabouts...generally if a lender uses an affordability calculation then it's designed to give a more accurate picture of what you can and can't afford...some of the shadier lenders have debt ratio calculations which are designed to agree a lending amount that mainstream lenders would throw up their hands in horror at...but they serve a purpose - that is to release equity for the lender to make money from

[minimax]

I really think getting a second charge is a mugs game.

- although not for those lenders who push them (firstplus, ocean, etc)

you get charged a huge fee (1-5% of the loan) and then a huge interest rate, and they come with very little in the way of flexible features - want to make an overpayment on your fixed rate? can't. sorry. you're stuffed not a good way to borrow.

best way to do it is to go to your existing lender (much like our friend above) and aask them for an advance. If this is not forthcoming, or not forthcoming on good terms (they'll often try and fob you off with an advance on their current standard variable rate ) then you simply look around to remortgage to someone more acceptable.

even if this means incurring redemption fees from your existing lender, it's worth actually working out whether overall you'd save money

[pappa lurve]

I have an amazing mortgage guy. Sorted all this kind of stuff out for me a few years ago and by moving my mortgage as well I actually paid a lot less!

Email me if you want his details.

[d33p]

Fellas,

Thanks for all your advice, very much appreciated. Sounds like I need to talk to an IFA which I will do now that I have a lead.

Minimax, I got mail so expect a call from me tomorrow on the matter.

Thanks again