Remortgage, Equity Release, Refinance help

Pixie5740

bery_451 said:

Pixie5740 said:

bery_451 said:

Hi,

Are all these 3 words mean the same thing? If not...

On a freehold property that is debts/mortgage been paid off on it (cleared), the question is if I want liquid cash from it without selling the whole house then what financial service I go for that has the lowest rates?

How does the following scenario works? As we all know house prices have gone up so will the lender use current valuations to lend me a certain % of liquid cash against the current value of my home?

For example in 2018, Home price is £100k, in 2021 now its gone up to £150 so if I borrow 50k against the 150k house, that means the lender has 1/3 equity of the house? However if the house price comes back down to 100k then how will that work? Will the lender still own 1/3 of the house of any market value as long the loan has been paid off?

The lender doesn’t have any equity and the lender does not known any of the property. The lender has a loan secured against the property which is not the same as having any equity or ownership. 

Depending on your age you would either be looking at a mortgage for an unencumbered property or equity release.  

What does unencumbered property mean?

On a secured loan against the house collateral the lender has no ownership or equity in the house however can repossess the house & enforce sale of the home if borrower defaults. From this sounds like the lender does have power/ownership.

I'm just looking for the best rates regardless of what type of financial product or service.

Unencumbered means the property does not have any finance secured against it and however it sounds to you the lender does not own any of the property. 

You need to speak to a mortgage broker. It’s not just that you want to borrow £50k and are looking for the best rates but the reason you want to borrow money that lenders will care about. You need to find a lender appropriate to your circumstances and given the questions you’ve been asking you need a broker to steer you through your options.