Remortgage or equity release? Confused.

ezhiks

I'm looking for some advice. At 57 yrs old and owning a house valued at around £250,000 in the UK, with no mortgage. I'd like to get a 'loan' of around £45,000 to put towards the purchase of a holiday home abroad. The total cost of this property will be £100,000 and I already have an appartment over there valued at £55,000 that will be taken in part exchange.

I've retired early and have an pension income of £32,000. I've looked into equity release but as my wife is 52 years old, as a couple we seem to be young for that, and remortgaging looks to be a bit complicated for what we want to do. It won't be a place that we'll be letting out, just for our own use now we've retired.

Can anyone advise us what type of 'loan' or 'advance', etc would be best suited?

ViolaLass

Why is remortgaging too complicated? It would seem to fit the situation given the information in your post.

opinions4u

In what way is a remortgage complicated?

You borrow the money and pay it back with interest over the agreed term.

EDIT: Thank Sophie . It's early!

sophievenusdoom

Opinions - he has stated in his post that he does not have a mortgage on the £250k property

Senior_Paper_Monitor

Equity release should nearly always be the choice of last resort - you sound easily mortgageable to me.

ezhiks

Thank you for the replies, it's very much apreciated. Equity release should be the last resort, I take that point.

When I've looked at the websites of mortgage providers they seem to be for buying UK properties. I'd like to use my outright owned UK house to secure the loan, in a more 'do what ever you like with the money' scenario. Is that possible? To apply for a mortgage (remortgage?), on my UK house and get a cheque for £45,000? Pay back over 7 years so it will be payed off before I'm 65. Or do I have to get the mortage on the foreign property?

Thank you.

magpiecottage

There are pros and cons.

The advantage of a mortgage on the foreign property is that your main home is not at risk.

The disadvantage is that a UK bank will probably not lend on it so you will probably need to sort out one with a local lender and the rules may be very different (any statutory consumer protection, if it exists, is likely to be different too).

A foreign mortgage will also, of course, be in a foreign currency - which exposes you to currency risk because you are paid in Sterling. If the Pound goes down your loan and the repayments will go up (and vice versa).

ezhiks

Thank you. I don't really want to go down the route of getting a mortgage on the foriegn property. I'm quite happy to use my UK home to secure the loan of £45,000, but I still don't quite know how to go about that. Who should I approach? Is it a mortgage or just a loan? Any opinions where to go would be very welcome.

Thrugelmir

A mortgage is a loan. The mortgage is merely the legal charge placed on a property to secure a debt.

Suggest you by ringing round the main lenders, HSBC, Llloyds, Nationwide etc to see what's available.

On a 7 year term and the amount required. You may be disappointed with their offers.

GMS

Raising the money on your unencumbered property sounds pretty straightforward. You have a decent pension income so should be ok, assuming all criteria is met.

The 7 year term may make it expensive though. If you are comfortable with the payments then you should probably stick to that plan. If not then you may be able to extend the term slightly and keep costs down.

Why not speak to a 'Whole of Market' broker and see what deals are available.

As stated in a few replies, Equity Release does not appear to be a suitable solution for you.

Good luck

ezhiks

Thank you, I a clearer picture of the situation now, too many years out of the borrowing market.

I'll call a 'Whole of market' broker and take it from there. Thanks for the good advice.