Query about releasing equity

Rockinbikergal

Hi All

I can't find a thread on this and hopefully I haven't annoyed someone by reposting a question that has already been asked.......

I currently own my own house and have a mortgage on it. I have had it on the market now for about 9 months but as you know the market is stale......

I was visiting a friend who told me that I could release the equity on the house that I am in atm and use this as the deposit for a house I am interested in buying and that I can then rent out the house I am living in until the market improves.....

I would be interested in doing this but I don't want to waste a brokers time...I know there are rules on mortgages and renting out and will be checking that with my mortgage company......and I also have to check out the tax issues with this proposal but can anyone help?

Thanks in advance for your replies

Rockin x

pararct

You would need to convert your existing mortgage to a specific Buy to Let product. This will almost certainly be at a higher cost and will be subject to specific LTV rules meaning you may not be able to draw as much equity as you had hoped.

Releasing the equity is fine although in effect you will be committing to two mortgages, your existing BTL and your new purchase. Any lender will calculate what it will lend you on your ability to pay for BOTH mortgages. This may not be as much as you think and for that matter the lender may not agree with your interpretation of the value and the one they do for the equity release.

Great plan if you can afford it but you need to speak to a broker and tell them all the facts.

Rockinbikergal

pararct wrote: »

you need to speak to a broker and tell them all the facts.

thank you indeed...I have an appointment to see my broker this week as I want to get moving on this as the house I am interested in now has some other prospectives