Equity Release - Anybody done this ?

stylus360

Hi All

i have a lot of equity in property and am looking to raise funds quickly for renovation of my own residence

Has anyone got any experience of this ?

Is it an 'expensive' way to borrow money ??

Anyone recommend a company/bank ???

Cheers

AnotherJoe

Since mortage rates are at an all time low, it's a very cheap way to raise money. But it does depend how much you want to borrow, you can't get a mortage for small amounts but you can add on to an existing one for smaller amounts (let's say, under £30k)

Also depends how much you earn. If you already have a mortage and are looking to extend then most people would just go to to their current lender since otherwise you'll have to start again with a new mortage and close the old one. If you don't have a mortgage then there are hundreds of lenders to choose from.

Also if depends on your earnings, age and how long you want to take to pay it back. . If you have little income, doesn't matter how much equity you have.

Can you give a rough idea of the factors ?

stylus360

My only earnings are from rental income now since i have finished full time employment, i suppose i would need to provide my income from my Accountant then ?

Or would my bank statements be ok as they have a paying in labelled 'Rent Allowances) every four weeks.

I do still have a small mortgage on my property of around £5500 @ £68 month, house value is approx £140k...

Cheers

AnotherJoe

stylus360 wrote: »

My only earnings are from rental income now since i have finished full time employment, i suppose i would need to provide my income from my Accountant then ?

Or would my bank statements be ok as they have a paying in labelled 'Rent Allowances) every four weeks.

I do still have a small mortgage on my property of around £5500 @ £68 month, house value is approx £140k...

Cheers

What would be acceptable income / proof of income would depend on the lender but since you already have a mortage and presumably a spotless record of paying it, asking that lender for an increase would be the quickest and most pain free option by far. It may even be possible over the phone, I'd just give them a call to start.

Thrugelmir

stylus360 wrote: »

My only earnings are from rental income now since i have finished full time employment, i suppose i would need to provide my income from my Accountant then ?

Are your rental properties mortgage free?

dunstonh

Equity Release - Anybody done this ?

Yes they have. I don't know the numbers but there has to be tens to hundreds of thousands a year.

Is it an 'expensive' way to borrow money ??

yes it is. The interest rate is typically higher than mortgage interest rates and as the interest is no paid, it is added to the debt and suffers compounding.

Anyone recommend a company/bank ???

Its mostly done via IFAs and whole of market mortgage advisers.

Can you confirm you actually mean equity release? I am wondering if you mean a further advance or mortgage for home improvements?

Equity release doesnt require an income. A mortgage does.

stylus360

Thrugelmir wrote: »

Are your rental properties mortgage free?

Yes they are.

AnotherJoe

Hmm, might be my bad, I thought OP was using the term loosely and just meant releasing equity from their property by remortgaging.

If they actually mean an equity release scheme, yes thats a bad idea except in a few circumstances. And we dont know what the OPs are.