Should I remortgage?

H

hector

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I currently have a property in england that is valued at £250k. There is a small mortgage on it of £30k at 2.5%,costing £180/month. It is currently rented for £850/month

I have enquired on remortgaging it and releasing equity, I have been offered a 150k mortgage at 4% from a UK bank. I haven't gone ahead with it yet.
So deducting the original mortgage and some expenses , I may be left with about £115k to reinvest.
If I do go ahead with taking the equity, what is the best way to reinvest it? Should it be in property or elsewhere?

Or should I just leave it as is and keep paying off the small mortgage?
Or should I sell the property outright and take the lot to reinvest?

Any financial advice would be most welcome,
thanks
hector
 
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It depends on your age, other assets and liabilities, goals etc. A lot more information would be needed to give an informed opinion.
 
hector said:
If I do go ahead with taking the equity, what is the best way to reinvest it? Should it be in property or elsewhere?
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So you want to release equity of £150k to re-invest in something else. Why would you take equity from 1 property at 4% to invest in another property where you may not get a higher return? Any investment you make will require a net return of 4% simply to break even. Obviously to get a higher return than that you will need to take risks on your capital. From an overall risk perspective the proposal does not seem to make any sense. You are getting a gross return of 4% on your existing property with finance costs of €750 pa plus other costs of renting out the property. I.e. Your net return would be well below the 4% requirement.
You appear to have no investment strategy or appreciation of risk (I'm taking this simply from the tenet of your post). You would be well advised to take professional advice before embarking on a risky strategy that could end up with you losing a substantial portion of your equity in this property.
 
44brendan said:
You appear to have no investment strategy or appreciation of risk (I'm taking this simply from the tenet of your post). You would be well advised to take professional advice before embarking on a risky strategy that could end up with you losing a substantial portion of your equity in this property.
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Completely agree (and apologies if you have done your homework). But it looks like you just like the idea of Re-Investing. You would need a return of >8% to make it worthwhile, and you won't get this rate of return without risk.

And Risk is not just a word in the small print - You could end up losing a significant portion of your £115,000, but still paying back a mortgage. Could you live with that? You need to get Professional advise.
 
Thanks for the swift reply. I haven't decided so your advice is most welcome and I am an open book on the matter.

So what do you advise? Should I just keep everything as is?
Or would I be better off selling the property outright?

I would like to use the equity in the UK property to try and make it bring in more of an income, ie. more than £825/month. As the yield is just 4% gross at the moment.

What can I do with the equity to do this?
 
hector said:
What can I do with the equity to do this?
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Get professional advice! See both of the above posts! If you are not an expert in investing then you run the risk of losing your full investment in seeking high returns.
 
hector said:
So what do you advise? Should I just keep everything as is?
Or would I be better off selling the property outright?
Click to expand...

Again, it's hard to give advice when we're only seeing one part of your finances. If you had 10 million in the bank or if you have 5 other properties in negative equity and no savings the advice would differ.

You should get professional advice.

Or put something into the money make over thread.
 
You need a hobby.

Your post is like a good thriller, it has a twist in the tale. As I read it I was expecting to be told what you needed the money for, to put a roof over your head, to fund a life saving operation, or at least I thought you were someone who had a great business idea and were wondering how to finance it, but no you are just bored and want to do something different.

Compelling investment case first, consider your options as to how you finance it second.

I suggest stamp collecting.
 
Thanks for the responses.
What if I use the equity to use as a deposit to purchase a property to live in here in ireland?
 
Ok so your compelling case is to purchase a property to live in in Ireland, then remortgaging or selling your English property may make sense.

To get meaningful advice here you need to explain your situation in full.
 
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