Is it possible to release equity to clear debt?

K

Khublei

Registered User
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Hello,

I have a small-ish mortgage, a house that it worth over double my mortgage, but then a lot of other debt (all debt is related to building the house, on one income, in the last year with costs sky rocketing).

Current situation -
Salary €63,000
Mortgage €187,000
House valuation €430,000 (would probably sell for more, no way I'm selling!)
Loans (from parents/credit union) €76,000

Income : €3200 + €720 (rent a room) = €3920 pm

I've Googled and I can see that I can release some of the equity for house improvement , education or medical expenses. Does anyone know of a provider who would do it for clearing debt? Even if I could get my mortgage to 3.5x my income it would clear €33,000 of debt. I do some side jobs, I'm going to be paid €7k (after tax) for one soon. So, I can pay this off. But I've saved aggressively for the last 5-6 years to get this built. I would like to be able to go back to living normally again sooner than 5 or so years.

Thanks
 
You would not be clearing debt but exchanging one debt for another - just being pedantic
 
Best to speak with a few banks , some will give an exception to the 3.5 times rule if your loan to value is high which it appears to be.

What is the split between your parents and the credit union?
 
Thanks for the responses.

I owe €30,000 to CU at 6.95%
44,000 to parents with no interest.

I’m not in trouble paying these back. But my parents are in their 70s and will need the money. I would just like to get these loans sorted asap and just have a mortgage
 
Khublei said:
Hello,

I have a small-ish mortgage, a house that it worth over double my mortgage, but then a lot of other debt (all debt is related to building the house, on one income, in the last year with costs sky rocketing).

Current situation -
Salary €63,000
Mortgage €187,000
House valuation €430,000 (would probably sell for more, no way I'm selling!)
Loans (from parents/credit union) €76,000

Income : €3200 + €720 (rent a room) = €3920 pm

I've Googled and I can see that I can release some of the equity for house improvement , education or medical expenses. Does anyone know of a provider who would do it for clearing debt? Even if I could get my mortgage to 3.5x my income it would clear €33,000 of debt. I do some side jobs, I'm going to be paid €7k (after tax) for one soon. So, I can pay this off. But I've saved aggressively for the last 5-6 years to get this built. I would like to be able to go back to living normally again sooner than 5 or so years.

Thanks
Click to expand...
Equity release just adds to your mortgage, which might ultimately make you worse off. Unless your loan to credit union is at a much higher rate.
 
I put the rate in the post above 6.95%. ill have a look around and see if anyone will giveme 3.5x my income. I don’t need an exception, I had a lower income when I applied and would like 3.5 of the new one. That would allow me clear credit union and start paying parents back. Thanks everyone
 
Any idea if I could go back to Avant and remortgage, get top up?
I took out mortgage last year (19nyear term, 2.1% fixer for 10 years) then home loan earlier this year (25K 5.7% over 10 years)

My salary will be increasing soon, is there any option to get longer term mortgage loan to clear the 5.7% loan? I dont want to lose my 2.1% for existing mortgage.
 
dubdub123 said:
Any idea if I could go back to Avant and remortgage, get top up?
I took out mortgage last year (19nyear term, 2.1% fixer for 10 years) then home loan earlier this year (25K 5.7% over 10 years)

My salary will be increasing soon, is there any option to get longer term mortgage loan to clear the 5.7% loan? I dont want to lose my 2.1% for existing mortgage.
Click to expand...
Best to ask your broker or even Avant themselves directly.
 
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