Remortgaging my paid up house

carpenter365

Hello All, not sure if this is a very obvious question but here goes...

I currently own my house outright as I borrowed some money from my family to pay off the mortgage before the fixed rate came to an end. I need to pay them back within the next year or two and so one option would be to take out a fresh mortgage, I would be looking for around £150,000 on a house worth £800,000. Would this be straightforward or would any bank only want to lend if the monies were being used to pay back another lender? Is it as simple as once the mortgage is completed, they ask me what account I want the money paid into? Many thanks

Hoenir

carpenter365 said:

 Is it as simple as once the mortgage is completed, they ask me what account I want the money paid into? 

Any particular reason for asking this question.  Remortgaging in principle is a straighforward process.  

carpenter365

I think my concern is that the lender would not want to pay the money directly to me as they cannot control how it is spent ie what is to stop me spending the money on a Bentley!!

Ayr_Rage

In 1999 I mortgaged my owned house and bought a new Porsche 911.

It was cheaper than any loan and I didn't want to sell any shares.

born_again

carpenter365 said:

I think my concern is that the lender would not want to pay the money directly to me as they cannot control how it is spent ie what is to stop me spending the money on a Bentley!!

They are not worried what you spend it on. If you don't pay it back, they get the house....

Flugelhorn

I had am offset mortgage and asked them about the "reserve" - they said "you can buy a lamborghini if you like, none of our business"

carpenter365

thanks everyone!

Hoenir

carpenter365 said:

I think my concern is that the lender would not want to pay the money directly to me as they cannot control how it is spent ie what is to stop me spending the money on a Bentley!!

If it goes to your family they could simply hand it back though...........

gwynlas

As ever the lender is only concerned about affordability so it would depend on income and age how long you could have a mortgage for.

silvercar

gwynlas said:

As ever the lender is only concerned about affordability so it would depend on income and age how long you could have a mortgage for.

An equity release mortgage would only worry about property value, and a LTV of only 25% would be fine.

carpenter365

silvercar said:

gwynlas said:

As ever the lender is only concerned about affordability so it would depend on income and age how long you could have a mortgage for.

An equity release mortgage would only worry about property value, and a LTV of only 25% would be fine.

Thank you, so with this type of scenario, I am restricted to an equity release mortgage as I note that the interest rates are considerably higher than std remortgage rates?