Need to raise equity

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Hi, I wonder if someone can help me please.

I needed to raise some equity against my house which is currently mortgage free. I'm in my very late 40's and was made redundant some 18 months ago. I am finding it impossible to secure a new job, so no real income to speak of at this time.

Basically I wanted to raise a loan of 25% against the value of my property for a period of 5 years at which point I intend selling my property. This loan would be on an interest only basis and I would essentially be funding the interest payment from the loan capital.

Would any bank or BS lend on this basis?

Any info or help much appreciated

neas

seems a bit weird. 5% interest rate... would mean you pay back some 30% of what you are going to borrow.
Are you sure this s your only option?... Why not sell the house now and just rent for 5 years? Or sell the house and downsize to a smaller property... Im sure this would be more efficient.

Also beware the house prices have started dropping so what you think 25% may get you might not... as the house may be valued at less.

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Many thanks for your reply neas.

I fully appreciate all that you have said. My 25% is also arrived at by marking my property's value down by some 20%.

My initial thoughts to act as I detailed above are based on my youngest's schooling together with the fact that there are not too many rentals where I am located. Plus on a positive note something may break on the jobs front.

I just need to know whether banks or BS will lend on the basis of my current circumstances.

Cheers

silvercar

Sounds like you want a form of equity release, though normally this requires you to be a lot older than you are.

I don't know if lenders would want you to have an income before they lent you money, you may need to look for a secured loan rather than a mortgage.

Dan:_4

neas wrote: »

seems a bit weird. 5% interest rate... would mean you pay back some 30% of what you are going to borrow.
Are you sure this s your only option?... Why not sell the house now and just rent for 5 years? Or sell the house and downsize to a smaller property... Im sure this would be more efficient.

Also beware the house prices have started dropping so what you think 25% may get you might not... as the house may be valued at less.

neas - just because you have chosen to live in rented accommodation, does not mean everyone else should.

poppy10_2

No income normally means no mortgage.