Help Re; Getting Money Out of Our Property!

slapmatt

tturnstill1988 wrote: »

Starting to really sound like a bad idea then! We have some debts and would need around 15/20k to clear this. So realistically that!!!8217;s all we!!!8217;d want to get hold of. Getting a loan for this is out of the question.

You need to work out what these debts will cost you compared to borrowing the money on your mortgage over a 25 year term.

If your other debts are short term then they may actually be cheaper overall even if the interest rate is higher than what you're paying on your mortgage.

MEM62

ThePants999 wrote: »

No, they haven't. They put down an unspecified deposit, so they've gone from some-unknown-amount-but-less-than-149K to 137K.

You are quite right. I missed that.

thelem

Your current mortgage is based on the purchase price. Even £137k is more than 90% of £149k, so I assume you're on a 95% LTV mortgage with an interest rate around 4%?

If your £200k valuation is accurate, then you've now got the option of re-mortgaging based on the new valuation. That gives you an LTV around 70%, which should allow you to get an interest rate below 2%.

There are costs involved when re-mortgaging which will eat up some of that saving. If you're currently on a fixed rate deal, then that is likely to have an early repayment charge (ERC), and there may be fees for the new valuation and mortgage. The estate agent valuations will likely be optimistic, so before spending any money, run the sums with a few valuations. What will you save if the valuation comes in at £160k? £170k? etc At what point does the re-mortgage become a good idea. Can you pay a lower ERC if you wait until just after the anniversary of your current mortgage deal?

Most banks, including Nationwide, have mortgage calculators on their site, so you can try different deposits, valuations and terms and see what impact that has on the interest rates for the deals they offer. Also find your property on Zoopla and see what they think it is worth. That will be based on the price you paid for it, plus a modifier to reflect what has happened to local house prices since you bought it. Given what you've said (that you under paid and have since added value), Zoopla's valuation should be at the bottom end of what it's worth.

WibblyGirly

Have you tried to move any of your debt onto 0% balance transfer cards? I'm by no means an expert in mortgages etc but I think posting a SOA and cutting down outgoings, transferring to 0% where you can and paying it down fast would be a better idea than a 2nd mortgage!