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    • Mistermagoo
    • By Mistermagoo 16th Apr 19, 9:45 PM
    • 12Posts
    • 1Thanks
    Use up capital and then free equity?
    • #1
    • 16th Apr 19, 9:45 PM
    Use up capital and then free equity? 16th Apr 19 at 9:45 PM
    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
    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.
Page 1
    • middleclassbutpoor
    • By middleclassbutpoor 16th Apr 19, 9:51 PM
    • 612 Posts
    • 550 Thanks
    • #2
    • 16th Apr 19, 9:51 PM
    • #2
    • 16th Apr 19, 9:51 PM
    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.
    • Mistermagoo
    • By Mistermagoo 16th Apr 19, 10:17 PM
    • 12 Posts
    • 1 Thanks
    • #3
    • 16th Apr 19, 10:17 PM
    • #3
    • 16th Apr 19, 10:17 PM
    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 more
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