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Equity Release Query

Hi, sorry if this has been asked before but I couldn't find any reference to it on a browse through the site.

I live alone and have no dependents, with just under 3 years to go on mortgage which is part repayment, part endowment. I have been told by the endowment insurance company that the endowment is on track to meet the amount required to pay off the mortgage.

I currently have approx. £36,000 outstanding on my mortgage. A house in the same street recently sold for £108,000 which encourages me to believe I may have some equity in my property.

My query is this: is there an easy and cost-effective way to release some of this equity and allow me to use some extra money for holidays etc?

Any help would be appreciated.

Comments

  • the simplest answer is to remortgage. Depends on your circumstances, and if you want to continue making payments.

    If you are in a situation where you cant remortgage (maybe your age or other reason) than send me a private message and I'll go into more detail for your individual case. (In case you dont want people on this board to see your personal details
    Anything I write is based on my opinion only. Before acting upon any advice from anyone on a forum further professional advice should be sought.
  • cldn
    cldn Posts: 5 Forumite
    Hi, thanks for the info, I'll look further into this.
  • tonys_3
    tonys_3 Posts: 332 Forumite
    Hi
    It might be worth checking to see by how much your endowment will produce approx
    in three years time.If you are on target to repay the mortgage plus a fair few thousands more,you should be able to withdraw some of the surplus now,with the
    permission of your building society.You also have the option of repaying the amount or not-after all it is your money.
  • GDB2222
    GDB2222 Posts: 25,740 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    cldn wrote:
    My query is this: is there an easy and cost-effective way to release some of this equity and allow me to use some extra money for holidays etc?

    I must be terribly old-fashioned, but this seems anathema to me. I would borrow to finance capital expenditure, eg buying the house or extending it. I might even borrow to finance a new bathroom or kitchen.

    But borrowing long-term to have a holiday? Not for me. Am I living on another planet?
    No reliance should be placed on the above! Absolutely none, do you hear?
  • dougk_2
    dougk_2 Posts: 1,403 Forumite
    GDB2222 - No you are not on another planet (or if you are the same one as me!)

    I was brought up to believe you only thing you should only ever borrow for is a house and things to do with the house.

    Everything else you can have, do or want to own is not a neccessity.....(including cars - if you require a car for work then work should provide it one way or another!)

    If you don't have the money you simply go without! One exception to this is in my view is if you are in your twiglight years and you don't want to pass your house on or you have no-one to pass it on to - in that case then I say its fine to borrow against your house!

    I think that is the problem today borrowing is too easy. The way to stop the debt problems people are having is not to have unsecured loans.
  • lisyloo
    lisyloo Posts: 30,011 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    "Everything else you can have, do or want to own is not a neccessity.....(including cars - if you require a car for work then work should provide it one way or another!) "

    Hi Doug,

    What about using your mortgage for a cheap car loan and paying it back over say 3 years?
    I could personally justify that as being preferable to taking a higher rate unsecured loan.
    I would not want to pay for it over 25 years though, I would want to pay it back over a short term.

    What's wrong with that, assuming you are disciplined enough to follow through?
  • dougk_2
    dougk_2 Posts: 1,403 Forumite
    I think the point is its still costing you money (interest).

    The best policy is not to borrow and only buy something if you have the physical cash with the exception of the house itself. If you need another car buy a cheaper second hand one, once you have put aside the money for it.

    If you buy are car at £6,000 over 3 years then you have roughly speaking you will actually pay around £7,000 for it by borrowing so its hardly saving money!
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