Need release equity in home advice

L

Lyndsay

Guest
We have 117,00 left to pay on our mortgage and the value of our home is 400,000 approx how can we release equity withour remortgage or top up loan which is what our mortgage lender ( First Active ) want to forc us to do. My husband is the only income earner. We are 44 and 38 yrs old.
 
How much equity do you want to release and for how long? Why do you object to re-mortgaging / toppping up?
 
You can't. Releasing equity is basically giving the lender more of your home as security against the loan.
 
I don't see how you can release equity without remortgaging-any other product by another name will be effectively the same thing (or worse!) I would have thought.

To generate cash, but only a monthly basis, you could look at switching your mortgage to NIB, who are the most competitve on the market where the loan-to-value (LTV) is as low as yours AFAIK.
 
I don't understand - how do you indend doing an equity release unless you remortgage the house? Unless you mean something like this?

Post crossed with previous ones...
 
Difficult to see exactly what you have in mind. You want equity release whch means you need to borrow more. By definition this means increasing your mortgage. Option 1 is a top up loan from existing mortgagor or option 2 is to transfe to new lender and look to consolidate existing amount plus new requirement over longer term to keep repayments low. Either option will require you increase your mortgage.
 
this is not uncommon thinking from people out there. I recently had to explain to someone the principles of equity release...it was quiet funny actually. They thought that because their house had gone up in value that they could release this money..(as in be given it - not as a loan but as some sort of cash bonanza)... Its amazing the amount of people who do not realise the basics of lending...
 
Lyndsay said:
We have 117,00 left to pay on our mortgage and the value of our home is 400,000 approx how can we release equity withour remortgage or top up loan
Click to expand...

Perhaps you meant 'with our remortgage'? If this is what you meant just speak to your lender regarding how much you need and over what term and they will calculate your new monthly repayments.

By extending the term on your existing mortgage the repayments will be lower but you will pay more in interest than just taking the top up over a shorter term.

If you would prefer to raise money without using your home as security, the other option would be a personal loan. Compare the amount required, the term and the interest rate to figure out which is best suited to your circumstances.

If this isn't what you meant apologies for second guessing.
 
Hi

Thank you to those who gave me advice. We will see about a top up loan as we don't want to extend the term of our mortgage. We orginally borrowd 135,000 and over the next few years will have college fees etc to pay. By the way this loan is pay greedy solicitors fees in a divorce case in which I was the respondant. My ex ran up my costs because he would not appear for his own appeal he managed to drag it out for over 3yrs. Some legal system, so in effect the money he was ordered to pay for his daughter will now have to be used to pay back a top up loan and the courts are ment to protect the child. Wish i had married in Finland.
 
Hi Lyndsay,
You don't necessarily need to extend the term of your mortgage. For an equity release, you can make the repayments over a different term than your existing mortgage. For example smaller amounts relative to your mortgage can be repaid in 3 years, 5 years, 10 years, whatever period you specify. Obviously the lower the term on the equity release, the lower the overall interest payable but the higher the monthly payments
Best of luck
 
You may need to put in place additional mortgage protection life assurance cover if you increase the amount that you borrow on your existing mortgage regardless of the term (e.g. shorter, same as at the moment but with higher repayments, longer etc.) if your existing cover isn't sufficient to cover the new amount.

Probably a good idea to get independent, professional advice.

Sounds like your ex might be more to blame for your divorce costs by dragging things out rather than the solicitor necessarily being to blame for charging you for services rendered?
 
Only one other way to 'release equity', without top up or remortgage and that is to sell and buy cheaper house.
 
TTV said:
this is not uncommon thinking from people out there. I recently had to explain to someone the principles of equity release...it was quiet funny actually. They thought that because their house had gone up in value that they could release this money..(as in be given it - not as a loan but as some sort of cash bonanza)... Its amazing the amount of people who do not realise the basics of lending...
Click to expand...

The scary thing is that so much of Ireland's economic success is based on the spending ability of people who have a very tenuous grasp of economic fundamentals!!
 
If you top up your mortgage by €10,000 and pay it off at the same rate you are currently paying toward your loan and credit card you should clear it in a much shorter time which will have a positive long term implication. However if you spread short term debt over the balance of your mortgage term you will pay a lot more interest which, of course, is negative over the long term. Depending on your lender you should be able to take as little as a three year top up or you could just accelerate payments to clear the €10,000. Also check to see if there are costs involved in topping up.

Sarah

www.rea.ie
 
You must log in or register to reply here.
Back
Top