Releasing equity for deposit on second mortgage

nazjon

Hello everyone,

I have been scrouring the net but cant seem to find difinitive answer. Basically I need a bigger house, mine is currently on market but not going to sell and I want ro rent it out (I have checked and can get consent and they have agreed is self financing). The problem is I dont have much of a deposit and was hoping to use some equity, which there is around 70k equity in my house. My mortgage is also fixed until May 2012 with 3k early repayment charge which I obviously want to avoid.

The question is do you think Santander will release some equity in order for me to buy new house or do I need to remortgage to do this and incure the 3k fee? Simple question but I cannot find an answer!!!

In terms of my finances I would be fine getting mortgage (good credit history, stable salary etc) obviously with deposit and I would need around 45k deposit with the house I want!

Any ideas appreciated!:)

Thrugelmir

You would need to remortgage. This could be done by having a sub account under your existing mortgage charge. So the existing product would remain in place.

There's more cost to letting than just covering the mortgage.

brit1234

Releasing equity in a falling market is dangerous as it doubles your loses in the price falls.

It is better you price your existing home right in the first place to sell. Gearing / equity release is one of the main reasons landlords get repossessed more than other groups.

nazjon

Thanks for replys. Ok so I wont release equity, didnt really want to but am in a bit of strange situation and need bigger house with my second child coming along!

Its probably too complicated to put on here as it involves my partners finances as well, she is owed 40-50k from her ex in divorce but still not got it after 4 years and im not holding my breathe...basically she was too soft and they decided to sort without solicitor and guess what....she walked away from everything and left it and he has not bothered!! She is now getting solicitor but I fear is too late and the value of their house's (they had 2) has gone down too much and the ex is terrible with finances so blown a lot of money!

Thrugelmir

nazjon wrote: »

Its probably too complicated to put on here as it involves my partners finances as well, she is owed 40-50k from her ex in divorce but still not got it after 4 years and im not holding my breathe...basically she was too soft and they decided to sort without solicitor and guess what....she walked away from everything and left it and he has not bothered!! She is now getting solicitor but I fear is too late and the value of their house's (they had 2) has gone down too much and the ex is terrible with finances so blown a lot of money!

Best to tackle one issue at a time.

brit1234

nazjon wrote: »

need bigger house with my second child coming along!

How about an extension? Is there anywhere you can extend the house out and put another bedroom on top.

nazjon

I know need to tackle one issue at time and think thats what im going to do.

I cannot extend, I live in Coach house which is leasehold and doesnt have own garden (this is the biggest issue with kids, I bought the place when I was single).

I think I have decided I am going to rent mine out and rent another house as much as it hurts me to do as I wont be able to save as much but it will give the kids and missus a proper home. I have a real problem with renting as I just see it as throwing money away but need to get over that mental block!!