Releasing equity in house to buy another place.

XsApollo

Are there any lenders that release equity in a property to use as a purchase for another one.
Have a mortgage on our home with LTV under 50% I reckon.
Mortgage owing is around 83000 and value of the house is probably around 180 to 200k.
Repayments are low 350 a month and no other debt.
So thinking could get another place with a low mortgage also of around 400 a month but require 30% deposit.

coylemj

The only way you can 'release the equity' in a property is to sell it.

When property prices go up such that the gap between the value of your property and the outstanding mortgage starts to widen, people get the notion that there is some kind of unused 'equity' which they should use to fund the purchase of another property. This is the type of speculation which leads to a bubble followed by a crash.

Do you have no sight whatsoever on the causes of the last financial crash?

XsApollo

coylemj wrote: »

The only way you can 'release the equity' in a property is to sell it.

When property prices go up such that the gap between the value of your property and the outstanding mortgage starts to widen, people get the notion that there is some kind of unused 'equity' which they should use to fund the purchase of another property. This is the type of speculation which leads to a bubble followed by a crash.

Do you have no sight whatsoever on the causes of the last financial crash?

To be honest I don’t care what caused the last crash?
I’m just asking a question if it’s possible.

It’s something I was thinking as The mortgage is pretty low at 350 a month and the mortgage on a new cheap place would be 350 a month.
So not really a big debt if it could be done.
Anyway looks like I better start saving as it’s not possible.

coylemj

XsApollo wrote: »

To be honest I don’t care what caused the last crash?

In which case this pearl of wisdom applies ......

Those who do not learn history are doomed to repeat it.

Jim2007

XsApollo wrote: »

To be honest I don’t care what caused the last crash?

Well since we're being honest.... it is beyond me why anyone would be will to make such a large financial commitment, without taking the time to understand the market he is committing his money to. It would seem to suggest that loosing money is not a concern of yours.

XsApollo

Jim2007 wrote: »

Well since we're being honest.... it is beyond me why anyone would be will to make such a large financial commitment, without taking the time to understand the market he is committing his money to. It would seem to suggest that loosing money is not a concern of yours.

Explain to me how I would lose money.
Does everybody that buys a second place lose money?
I do understand what I’m commiting to if I did commit?

I have an a net income of 4500euros a month.
My current mortgage is 350 a month.
If my outgoings on both places were a 1000 a month I don’t think I would be in too bad a position.

emeldc

XsApollo wrote: »

Explain to me how I would lose money.
Does everybody that buys a second place lose money?
I do understand what I’m commiting to if I did commit?

I have an a net income of 4500euros a month.
My current mortgage is 350 a month.
If my outgoings on both places were a 1000 a month I don’t think I would be in too bad a position.

It looks like you want to spend around €100k on the new place. Whats the plan. Rent it out or holiday house?

XsApollo

Anyway I asked a question if something was possible.
Not a lesson on why the crash happened or it being suggested that losing money isn’t a concern of mine.

So end of thread.
Thanks.

Sheep Shagger

XsApollo wrote: »

Anyway I asked a question if something was possible.
Not a lesson on why the crash happened or it being suggested that losing money isn’t a concern of mine.

So end of thread.
Thanks.

Was wondering the same question, we've been told no by BOI - why, nobody can tell me. They have a mortgage on one property, why can't they take one on the new one and combine the debt.

Backwards compared to other countries and this has nothing to do with the boom/bust/bubble.

Was told Pepper do it if that's any use to you...

Reati

XsApollo wrote: »

I have a current net income of 4500euros a month.

FYP Plenty had that in the last bubble too.

sKeith

I don't see what the problem is.

>The only way you can 'release the equity' in a property is to sell it.
What is remortgaging all about then?

You want to remortgage you current mortgage, so you have a lump sum, (will push the monthly repayments up though, from 350 to .. 600?? no idea, do the maths)
You purchase the second property with its own mortgage, and its own separate monthly repayments.

Is it a risk, yes of course, but a risk that you can figure out for yourself if its worth doing or not.

XsApollo

Reati wrote: »

FYP Plenty had that in the last bubble too.

That was genius.

XsApollo

sKeith wrote: »

I don't see what the problem is.

>The only way you can 'release the equity' in a property is to sell it.
What is remortgaging all about then?

You want to remortgage you current mortgage, so you have a lump sum, (will push the monthly repayments up though, from 350 to .. 600?? no idea, do the maths)
You purchase the second property with its own mortgage, and its own separate monthly repayments.

Is it a risk, yes of course, but a risk that you can figure out for yourself if its worth doing or not.

Thank you.
I understand the math.
Just wondering was it possible to get a lump sum out.
But instead got...... well you can see above :-D

XsApollo

Sheep Shagger wrote: »

Was wondering the same question, we've been told no by BOI - why, nobody can tell me. They have a mortgage on one property, why can't they take one on the new one and combine the debt.

Backwards compared to other countries and this has nothing to do with the boom/bust/bubble.

Was told Pepper do it if that's any use to you...

Boi will release equity to fund home improvements or a gift to your kids and another thing.
Pepper will give you the cash to be spent on another place as long as the mortgage is with them but for home improvements only again.

Was at a broker yesterday and he said KBC will give 30k without really investigating wether you are going to be spending it in home improvements.
More than that and they will be.

So it’s not possible to get the cash for use as another deposit , but it’s possible to get the cash.

daheff

Op to answer your question, the way to release equity in your current property is to remortgage(increase your mortgage). This will mean higher repayments on the property.


The cash received can then be used as a deposit for a mortgage on 2nd property.


As to your reasons & understanding of the property market, that's a different question/thread.

Sheep Shagger

daheff wrote: »

Op to answer your question, the way to release equity in your current property is to remortgage(increase your mortgage). This will mean higher repayments on the property.


The cash received can then be used as a deposit for a mortgage on 2nd property.


As to your reasons & understanding of the property market, that's a different question/thread.

Umm you'd think that you could do the above but in the case of BOI you can't. With them the only way to release equity (to fund a deposit) is to sell the property.

daheff

Sheep Shagger wrote: »

Umm you'd think that you could do the above but in the case of BOI you can't. With them the only way to release equity (to fund a deposit) is to sell the property.

Or remortgage with a different bank.

Sheep Shagger

daheff wrote: »

Or remortgage with a different bank.

On a tracker with BOI so not too attractive, just can't understand why they can't recognise and lend against equity in a property they already have a mortgage over.

Badger2009

With your earnings and low mortgage payments you could surely save a good lump sum towards another property in a very short space of time.

FWIW if I was in your position I would focus on overpaying on the principal of your current mortgage. It seems crazy with your earnings to be paying so little as either the property was very cheap or the term is long. If the term is long the interest paid will be considerable. Just my two cents but I suppose everyone's circumstances are different.

evolving_doors

: XsApollo

I have a current net income of 4500euros a month.

Reati wrote: »

FYP Plenty had that in the last bubble too.

Well done Einstein, all mortgages given are usually based on current income.

daheff

Sheep Shagger wrote: »

On a tracker with BOI so not too attractive, just can't understand why they can't recognise and lend against equity in a property they already have a mortgage over.

Because they want you to leave your tracker mortgage.

Tracker mortgages are not profitable for them. They wont lend more against the property because (i guess) it leaves them open for somebody to just want to top up the mortgage....which they dont want. I reckon they think people will just pay down the mortgage if they really want to release equity and BOI have their money back and stop losing money on it.

Reati

evolving_doors wrote: »

Well done Einstein, all mortgages given are usually based on current income.

You knew exactly what I meant but if you don't I can dumb it down for you. I forget sometimes, even with my Einstein level IQ, that less intellectual folks like yourself might be reading. I'll remember that for future!

sKeith

Reati wrote: »

You knew exactly what I meant but if you don't I can dumb it down for you. I forget sometimes, even with my Einstein level IQ, that less intellectual folks like yourself might be reading. I'll remember that for future!

ehh, what?

Sheep Shagger

daheff wrote: »

Because they want you to leave your tracker mortgage.

Tracker mortgages are not profitable for them. They wont lend more against the property because (i guess) it leaves them open for somebody to just want to top up the mortgage....which they dont want. I reckon they think people will just pay down the mortgage if they really want to release equity and BOI have their money back and stop losing money on it.

Don't think it's anything to do with it being a tracker, you can't do it with any home loan you have with them it seems. Makes no sense given how lowly geared we are especially when you can borrow extra (at today's rates) for say renovations - using the same security.

lcwill

I've also asked this question. I wanted to release equity on a rental property to use as a deposit on another rental property (keeping both at 50% LTV) and was told by a broker that the banks just weren't interested anymore. I would have to sell the first property and use the proceeds as deposits on two other properties. Not sure in what sense this is a lower risk to the bank then just letting me take equity out of the property I already own but that seems to be their position.

Fol20

lcwill wrote: »

I've also asked this question. I wanted to release equity on a rental property to use as a deposit on another rental property (keeping both at 50% LTV) and was told by a broker that the banks just weren't interested anymore. I would have to sell the first property and use the proceeds as deposits on two other properties. Not sure in what sense this is a lower risk to the bank then just letting me take equity out of the property I already own but that seems to be their position.

I would talk to Pepper and get a better broker. Releasing equity is still doable and I can say this from my own personal experience. Peppers reputation may not be as good as they bought a lot of loans in arrears years ago but my dealing with them have been second to none. Very easy to talk to their team and get stuff over the line.
Depending on your financial situation BOI are also able to release equity. I didn’t go with them but I had been approved.

Sheep Shagger

Fol20 wrote: »

I would talk to Pepper and get a better broker. Releasing equity is still doable and I can say this from my own personal experience. Peppers reputation may not be as good as they bought a lot of loans in arrears years ago but my dealing with them have been second to none. Very easy to talk to their team and get stuff over the line.
Depending on your financial situation BOI are also able to release equity. I didn’t go with them but I had been approved.

What amount (or percentage) of equity did you have approved by BOI.

Really don't want to go down the Pepper road as their rates are not competitive.

Seems 'computer says no' is the answer in a lot of cases, lending in this country has gone from being a skill (by people who actually know what they are doing as opposed to throwing money around like it's confetti) to a checklist...

Fol20

Sheep Shagger wrote: »

What amount (or percentage) of equity did you have approved by BOI.

Really don't want to go down the Pepper road as their rates are not competitive.

Seems 'computer says no' is the answer in a lot of cases, lending in this country has gone from being a skill (by people who actually know what they are doing as opposed to throwing money around like it's confetti) to a checklist...

Depending on situation about 50pc LTV for me

I would also take a look at the interest rates of both. BOI is 4.6 variable with LTV <50pc while pepper is 4.4pc.

unclestan

hi lads just going through a break up and have left the family home.just want to know how to release equity from the house to start over again.

emeldc

unclestan wrote: »

hi lads just going through a break up and have left the family home.just want to know how to release equity from the house to start over again.

Simples. Just get the ex to give you what you're due and off you go. What could be easier