Equity release mortgage?

squashy

Hope someone can help!

We are in the fortunate position of owning our home with no mortgage outstanding. it is worth around £200,000.

However we are looking to essentially borrow against the value of the house to do some alterations, at a cost of around £15,000.

Various people have said this is essentially a remortgage as we are not moving house, not sure if this is true? I have checked on moneysupermarket and there are lots of good remortgage offers, but will we be eligible to apply? (Thinking Woolwich Open Plan Switch & Save Tracker 3RF @ 4.99%). There is little or no info on there about equity release, unless you are elderly!!

Another consideration is that there's a strong possibility we may be able to pay off the mortgage/loan in full in around 3 years. Unfortunately the repayments are too high to simplify it and go for a 3 year personal loan.

Assuming we are lucky enough to find a fee free mortgage, are there any other charges we should know about? Are there conveyancing costs? We know about valuation fees.

What would people suggest?

Ian_W

Equity release schemes are basically for the [at least] over 55's as they don't involve repaying the loan until the pearly gates have opened for the borrower!! :A

It is a remortgage and treated as such by many lenders I believe but one of the problems you will have is the small size of the loan as many lenders don't do them under £25-30K. One I know who does is Nationwide and there may be others, probably likely to be mutuals then PLCs so try Britannia and Yorkshire BS's.

You will need a valuation and there will be legal fees but many remortgages offer these free. With a small loan fees have a disproportionate affect so it's probably better to go for a higher % interest rate with no or low fees.

As for the Woolwich, lots of the brokers who post on here say their admin and application processes are !!!!!! - so be warned.

HTH.