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Use up capital and then free equity?
Mistermagoo
Posts: 12 Forumite
Hello experts 
I'm in the fortunate position after years of saving to buy my first home. I went to see a place with lots of others and placed a bid.
A day later the EA rang to say the biddings up by 20k.
That is really pushing me as would need a large amount of capital on top of a 90% mortgage.
Doing my figures on it I think it would be worth 50k more than now (due to works needed) in a year's time.
I'm trying to justify entering the bidding war :eek:
If I spend that capital now, if the property does increase in value by 50k this time next year, can I then potentially get my capital back in the form of equity on another house purchase or other? Bit confused.
I'm in the fortunate position after years of saving to buy my first home. I went to see a place with lots of others and placed a bid.
A day later the EA rang to say the biddings up by 20k.
That is really pushing me as would need a large amount of capital on top of a 90% mortgage.
Doing my figures on it I think it would be worth 50k more than now (due to works needed) in a year's time.
I'm trying to justify entering the bidding war :eek:
If I spend that capital now, if the property does increase in value by 50k this time next year, can I then potentially get my capital back in the form of equity on another house purchase or other? Bit confused.
0
Comments
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You can't predict what a house will be worth in a years time.
If it's going beyond a comfortable financial point for you in terms of mortgage affordability and having the capital to do the work required, walk away. You won't know what the true cost of improvements/renovations as unforeseen problems can occur etc.
When you find a house - any equity you build, you take to your next house - either to use as a deposit or to use as a deposit and take some out to do improvements etc. Normally it's the former.0 -
So in a way, if the house does increase in value with the work completed, my initial capital plus whatever else in equity, will be available to me once more0
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