releasing equity

S

sevenlights

Registered User
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Hi All

I am in a situation, I have a house that is mortgage free. I am hoping to remortgage about 60% of the value of it. I then want to rent out the house while I go abroad and invest in another property there to live in. The rent will pay the mortgage here.

Are there any lenders that facilitate this, I dont work and have no proof of earnings. I know I can always sell the house either but I feel its the wrong time? I see ads all the time for elderly people with no proof of earnings being invited to release equity, what about a single person of 30?
 
Would you not consider just renting the house and using the income to fund your rental abroad? As it would be your only income in Ireland, the tax on it would be quite low, so you would not miss out on the investment aspect of the mortgage on your property here.
 
thanks for your reply, I just hate the thoughts of renting, its such dead money, Im looking to move for a few years and dont want to be left strapped either, with the remortgage, and a bit of mortgage there I could set myself up for a few years and leave this rat race here!
 
A couple of points:

- You are not "releasing equity" by remortgaging: you are simply borrowing. Despite what banks would have you believe by using terminology like this, the only way to release equity in something is to sell it.

- As has been pointed out in a recent thread, rent is no more dead money than interest payments.

The question you should be asking is whether it makes sense to borrow cash secured on a house here in invest in a property abroad, keeping in mind there's no absolute guarentee rental income (net of all expenses) would actually cover the cost of repayments.
 
ang1170 said:
A couple of points:

- You are not "releasing equity" by remortgaging: you are simply borrowing. Despite what banks would have you believe by using terminology like this, the only way to release equity in something is to sell it.

- As has been pointed out in a recent thread, rent is no more dead money than interest payments.

The question you should be asking is whether it makes sense to borrow cash secured on a house here in invest in a property abroad, keeping in mind there's no absolute guarentee rental income (net of all expenses) would actually cover the cost of repayments.
Click to expand...

The other question you should be asking your self is, If you intend to invest in property overseas can you guarantee that the value of that property will go up and not down. I would say that the future is not too bright in terms of property for many countries overseas at the moment. Renting in the short term at least may give you some time to guage the current global/local ecomomic climate.
 
guys whilst I appreciate you taking the time to reply, I feel that there is absolutely nothing of substance here! Does anyone have anything useful to offer on the subject?
 
The simple answer is that you *might* get a mortgage but with no income other than rent and with you resident abroad your only option is the sub-prime market - the main stream lenders would not be interested. Hope that helps.

Sarah W

www.mortgagesoverseas.com
 
Hi sarah

By sub prime, would that mean a higher interest rate? by any chance would you know what kind of rates are out there for 'sub prime'
 
Sub-prime mortgage rates begin at 6.45%.

But with the LTV adders and loaders they put on to this, the average rate is around 7.5%, higher again if you have impaired credit.

J
 
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