What would you do with £50000 equity??

jonnyb1978

You live in a bog standard 3 bed terrace that could do with slight modernising/upgrading with the option of an extension to the rear.

There is £50000 equity on the mortgage. What would most people do with the money.

Based on ideal situation of affording the new mortgage and already having a business plan. And see a nice property you like etc. Which one would you prefer to do???

silvercar

To release the equity you will have to increase your mortgage, can you afford to do this?

jonnyb1978

Yes i could afford this. I am looking at ways to invest. I would like to do work on the house to increase its value but would also like to invest in property abroad and maybe start my own business with my partner. Not sure what the best option at present.

WhiteLily_2

All depends what your attitude to risk is really.

PoorDave

jonnyb1978 wrote: »

There is £50000 equity on the mortgage.

Surely there is £50k equity AND a mortgage for the rest - the equity isn't on the mortgage as such.

Wording like this can confuse people into thinking they're "extracting equity from their house", when in fact they're simply borrowing more money!

The problem is a social one, in that equity is what "rich people" have, whereas debt is for "poor people". A clever way to repackage debt to make it more socially acceptable to get into a lot of debt if you ask me.

I would have a good think about what level of risk you want, and what level of risk each option carries.

jonnyb1978

Your right PoorDave i have a £39kmortgage and the house is roughly valued at £100k. I am just looking for peoples views on what would they want or do. The house does need upgrading as such which is what i want to do as work needed doing will definately add value to the house.
The house was bought when it was being repocessed 7 years ago for £35k on a 25 year mortgage. We have done some work to it and remortgaged it 1.5 years ago and done more work to its current state. At present mortgage is 39k over 21 years

---lee---

I have a lot of equity and the way I look at it is in worst case scenario I could downgrade and become mortgage free - so it's my safety net.

Spendless

We have a similar situation. Ours is a semi that had about £80K of equity. We have increased the mortgage to carry out the work. This is our situation, we live in the area we wish to, where our friends and several relatives are. It is catchemnt area to the school I wish my children to attend for both Primary and secondary education. I couldn't get better position for amenities, close to school, childcare facilities, village hall, shops, public transport.

My husband has just had a big pay-rise, that we haven't got used to so affording the increase was not a problem. We haven't increased the term. Our youngest is due to start f-time school this year, so within the next year or two I will also be contributing an income.

I'd say totally depends on your personal circs.

Tiger_greeneyes

I'd be more tempted to reduce the term of the mortgage and get it out of the way a few years early! You could (for instance) reduce it to ten years and save yourself tens of thousands of pounds - especially if you remortgage with low fixed rate deal.

Massive_2

" What would you do with £50000 equity? "

Are you offering?

clutton_2

i'd pay off my mortgage in full