remortgage to buy shares, allowed or not?

johnsmith0774

hi all,

i want to remortgage my house on a interest only mortgage to get the maxium cash out of the equity in my house. its worth £350000 with a £140000 mortgage, so i was thinking roughly £100000?

then i want to put it all into the stock market emerging markets, obviously waiting a few months untill the current bubble comes down a bit.

my main question is will woolwich let me do this or are there restrictions of what you can do with remortgaged money?

thanks for all advice!

jebervic

johnsmith0774 wrote: »

hi all,

i want to remortgage my house on a interest only mortgage to get the maxium cash out of the equity in my house. its worth £350000 with a £140000 mortgage, so i was thinking roughly £100000?

then i want to put it all into the stock market emerging markets, obviously waiting a few months untill the current bubble comes down a bit.

my main question is will woolwich let me do this or are there restrictions of what you can do with remortgaged money?

thanks for all advice!

My advice is don't do it !

johnsmith0774

can you say why?

maninthestreet

johnsmith0774 wrote: »

can you say why?

Well, do you think re-mortgaging your house to go on a gambling binge is a good idea??

johnsmith0774

its not a gambling binge its a long term (over 5 years) investment in the stock market!

Trollfever

Wealth Warning.

Shares can go down as well as up.

johnsmith0774

yes i know and they probably will go up over the long term investment. the question i was hoping for some help with is are there any restrictions on what you can do with remortgages money?

opinions4u

johnsmith0774 wrote: »

yes i know and they probably will go up over the long term investment. the question i was hoping for some help with is are there any restrictions on what you can do with remortgages money?

Different lenders will have different policies on what they will or won't lend for.

Lending for speculative investment isn't something banks will be overly keen on in the current climate, but some will consider it with a mix of good credit rating and low LTV. You'll need to call them to find out.

Personally I think you should consider the biggest ever use of property equity for speculative gains.

Endowment policies.

Not exactly a rip roaring success.

_Andy_

AFAIK Woolwich won't lend for that purpose.
You can ring them to check for sure.

DD4

I think you've asked this question on the wrong forums. MSE is a savers only website (IMHO), where the majority of people are more concerned with retaining rather than growing wealth. Any suggestion of moving wealth from one asset and placing it in another will be met with a degree of reticence and often outright fear.

I don't personally think there is anything wrong with your approach, but if you can't withdraw the money then you could try going interest only on your mortgage and setting up an ISA to store the repayment portion (and possibly some overpayments). From next year you are allowed to put away £10200 in a shares ISA.

Good luck.

Voyager2002

Firstly, ask your mortgage lender about their policy on allowing you to take some of your equity out of the house. Most lenders are likely to be helpful, so long as your house really is (still) worth more than twice as much as the amount you owe, and so long as your income would be adequte to service the new and higher debt.

Do remember that you would have to pay interest on the total amount borrowed, and of course interest rates are likely to increase from the present levels. So for your plan to make sense, you investment would have to perform well enough to show net growth even after covering your interest charges. Personally I don't think that is likely to happen.