Equity release to get a second mortgage
Discussion
Hi Guys
Is it possible to use some form of "equity release" to get a second mortgage on a house? My parents have seen a house that would be the main residence after some doing up, so would be purchased as a BTL house.
The current house was purchased for £170,000 and now worth over a million, with £50k left on the mortgage. Is it possible to either withdraw money from the mortgage balance (i.e. if £120k has been paid, withdraw £110k for a deposit on the second house) or free up the equity in the current home, without selling it.
Just keen to understand options.
Thanks!
Is it possible to use some form of "equity release" to get a second mortgage on a house? My parents have seen a house that would be the main residence after some doing up, so would be purchased as a BTL house.
The current house was purchased for £170,000 and now worth over a million, with £50k left on the mortgage. Is it possible to either withdraw money from the mortgage balance (i.e. if £120k has been paid, withdraw £110k for a deposit on the second house) or free up the equity in the current home, without selling it.
Just keen to understand options.
Thanks!
This question comes up time after time! I'm not aiming that at you for asking OP, just observing that every week sees a hopeful poster looking to "withdraw equity without selling" from their/their parents house. Here's an example with some discussion that may help you OP: https://www.pistonheads.com/gassing/topic.asp?h=0&...
The simple truth is that there is no way to "withdraw equity without selling". It may be possible to borrow more money utilising the equity in the house as collateral, but lending criteria will have to be met and the loan will have to be repaid with interest and charges.
The phrase "equity release" is one of the most pernicious marketing misdirections perpetrated by the financial services industry, and I am astonished that its usage has been allowed to continue. It helps the unwary feel that they are freeing up money that they already have, when the truth is that they are borrowing money that they clearly don't have. As someone posted in response to a similar question recently, an increase in the value of a house doesn't manifest itself in fresh spendable £50 notes until the house itself is sold.
The simple truth is that there is no way to "withdraw equity without selling". It may be possible to borrow more money utilising the equity in the house as collateral, but lending criteria will have to be met and the loan will have to be repaid with interest and charges.
The phrase "equity release" is one of the most pernicious marketing misdirections perpetrated by the financial services industry, and I am astonished that its usage has been allowed to continue. It helps the unwary feel that they are freeing up money that they already have, when the truth is that they are borrowing money that they clearly don't have. As someone posted in response to a similar question recently, an increase in the value of a house doesn't manifest itself in fresh spendable £50 notes until the house itself is sold.
Edited by WindyCommon on Tuesday 26th December 15:57
While I completely agree windy common I don’t think the OP is looking for “free money” they are looking for an additional drawdown based on the loan vs value of the current house to do what they want to do. This is perfectly feasible. Especially if they currently have a mortgage with a loan to value of a pitiful amount. The term equity release is used to mean many things to different people and if they can afford the additional cost then it will be doable
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