Mortgage Draw-Down facility

molly22

I have the above facility on my mortgage which is a tracker 1% above br for lifetime with no collar.
i have the option to draw down an extra £87,000.
should i be using this money to make some more while the rates are so low?
like buying a property to rent out or something else, any ideas?

thanks
molly

_Andy_

All very well at the moment but rates won't stay that low for long.

molly22

but how long is 'not long'?
does anybody know?
so could i do something in the short term?

molly

happybroker

Hi Molly, you're not going to get anything meaningfull from anyone on how long rates are going to stay this low for as no body hand on heart knows.

Buying and selling/ renting out property is not as straight forward as the TV would have us believe unfortunately so if you do decide to use this credit line for something in that area you really have to research, research, research and then try and take advice from some one who specialises in that field.

molly22

i just feel im wasting an opportunity.

is there anything i could do??

thanks
molly

getmore4less

molly22 wrote: »

i just feel im wasting an opportunity.

is there anything i could do??

thanks
molly

There are loads of things you could do but most will have risks that you don't actualy make any money or perhaps even lose some and will require a fair amount of effort to get right.

1.How much risk do you want to take?
2.How much risk can you take without financial ruin?

What skills do you have.

There are few easy way to make money, the successfull people work at it quite hard in a lot of cases.


One measure for risk you can use is what is the biggest repayment mortgage you could manage, that way you can take the risk of losing all the money you use to invest elsewhere.

foreversummer

It's all a gamble really Molly with the economy as it is. Think long and hard, certainly do not rush into anything just because you have a feeling you are wasting an opportunity - you could easily get your fingers burned. If it were that easy many people would be doing it, whatever it is you think you might like to try!

Foreversummer

ben37564

It all depends on how much risk you want to take. The rental market has improved a lot over the past 6 months as fewer people are able to buy a property these days. This would mean a Buy-To-Let could be quite lucrative.

Do your research thoroughly before commiting, find out what area you'd buy in, what the typical rentals would be, what mortgage you would need if any and what the repayments would be. You'll soon figure out whether it's worthwhile.

anselld

You could draw down the money and place in Halifax Websave 9month bond @ 3.45%. Assuming basic rate tax payer that is 2.76% net, vs 1.5% cost of borrowing, making circa £820 profit in 9 months.

Still not risk free if the interest rate goes up 1.25% you start losing. Make it a joint account or limit to £50,000 for full deposit protection.

geoffky

molly you want to borrow 80k to buy property in a falling market?? i think you are mad..i really do