Equity Release - have to give a reason?

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FiveFingers

Registered User
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Hi,

When doing an equity release, does your mortgage provider need to know why you want the money? Our mortgage is with NIB (ECB + .79%).

We intend to build a small extension to our home. Originally, we intended to get a top-up to finance the extension, but they wanted two quotes from builders and on this site I learned that they sometimes require invoices as proof that the work was done. Our builder has offered to do the work for cash at a great price, therefore we won't be able to provide invoices. So, can we just ask for an equity release and not a give a reason for the funds?

Thanks,
FiveFingers
 
Thanks for your response MortgageMate. We definitely don't want to switch mortgage provider. We only moved to NIB about a year ago, plus we qualify for their .5% LTV offer. We want to switch to this product and release about 20K equity.

Does anyone else know if we have to give them a reason for the funds?
 
I think it really depends on the bank you use. When I used Ulster Bank, they wanted receipts for every Euro spent.

If your builder won't provide receipts, then he's just evading tax, isn't he?
 
Not to mention the fact that if there is no paper trail it can be very difficult to get things resovled in the case of any disputes.
 
don't be suprised by this.

more and more people have been availing of equity releases. Banks have been increasing their own market risk by narrowing the spread between property value and mortage level.

I know of two of the main high street banks, which have sizeable mortage books, that have tightened up or pretty much stopped this. Orders from executive Credit committees and international investors, especialy in light of the recent huge scandal in financial circles of the Fanny Mae and Freddy Mac organisations.

Expext credit lending rules to tighten even further.
 
FiveFingers said:
We only moved to NIB about a year ago, plus we qualify for their .5% LTV offer. We want to switch to this product and release about 20K equity.
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Check out the previous threads on the offer in question. NIB know it's a very popular one and are quite selective about what they will and won't allow. In this case, your chances are slim to none (I'd edge towards none) of releasing the 20k equity with the re-mortgage on this product without providing full invoices/receipts.
 
I am looking to move to NIB LTV and asked could I release equity at the same time and there was no issue.

I might perhaps be easier if you have a very low LTV, including the top-up bit.
 
PGD1 said:
I am looking to move to NIB LTV and asked could I release equity at the same time and there was no issue.
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I presume you're using the money for work on the property and have no issues with supplying invoices (unlike the OP who has a non tax compliant builder requesting cash so unable to provide documented evidence of the work being done).

http://www.askaboutmoney.com/showthread.php?t=39006
Previous thread on the NIB product. Discussion of top ups etc. begins around page 3 and 4 and clearly shows NIB can be very picky.
 
Hi,

Thanks for all the replies.

I guess the only way to know for sure is to give them a ring and ask.

FiveFingers
 
No, I told them it was for another purpose not related to my PPR.

I'm guessing a very low LTV has something to do with it.

Although you've got me worried now! I wonder would they come back with a different answer once the forms are submitted!!
 
PGD1 said:
Although you've got me worried now!
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Wouldn't get too worried over it. I'm giving heresay from previous posters, you've been given first hand information from the lender.

Just highlighting possible problems for the OP, not saying it's impossible.
 
Don't forget if you have already submitted an application they will have it on their records so not too easy to apply for the same amount and then say its for a different purpose. For building extensions they look for paperwork such as engineering compliance reports to ensure work is finished to the required standard. Same stands in your own interest too.
 
ulster told me that I could have up to €60K with no questions or receipts or estimates. if I went over that amount, then all docuentation woudl be rquired.
 
That's interesting, Ravima. I think it must depend on each person's situation then because UB were very specific about what receipts they needed.
 
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