top up mortgage for share investment purposes

manonboard

Hello Everyone

I have about 20k in various investments. A few shares, and some peer to peer lending.
I make about 15% on average per year for the last few years.

I want to top up my mortgage and use the extra money to further my portfolio.
I'll absolutely talk to the bank (UB) but i wanted to get an idea from others of how to handle it, if its possible etc.

My LTV atm is 36%, so I would like to increase it to about 70%. Do you think this would be entertained by the bank. The collateral seems more than sufficent, and i've never missed a payment in 10 years (im many years ahead of schedule).

Thanks

jimmii

I was in a similar position and when I applied the bank really didn't care what it was for really. I topped up to 50% (from 0) once it was secured that was all they cared about.

What are you doing to hit 15%? Do you think you'll be able to see that sort of return on the higher amount still? If you're getting that from the markets you're doing pretty dam well fair play.

manonboard

jimmii wrote: »

I was in a similar position and when I applied the bank really didn't care what it was for really. I topped up to 50% (from 0) once it was secured that was all they cared about.

What are you doing to hit 15%? Do you think you'll be able to see that sort of return on the higher amount still? If you're getting that from the markets you're doing pretty dam well fair play.

Thank you Jimmii, thats really encourage.
Well the last few years, I was in some financial stocks and service stocks. Visa, Just eat, amazon etc.
They've worked really well over the last few years for me.
I dont know much about business/value, but for me, i pay attention to what services myself and my friends are using. Who are lower middle -> middle income earners. If i see a few of us using a service because we find it good and throw our money at it. It's usually a good investment i find. Long term of course, though many services tend to do well long term,

Another thing i've done is peer to peer lending which hits about 10% annually for me over 3-4 years. Thats nice because its soooo consistent so far. 400 loans, 5 defaults (though most of the principal was paid back before each default)

I dont know if i'll be able to hit the same return. I guess I am willing to try. We will see.



Anyways, thats great about the bank not caring about your purpose as long as its secured!

jimmii

If you can catch the right ones it can certainly work out well I remember switching from lovefilm to streaming thinking hmmmm this Netflix thing might just about work lol!

Nailing the right ones now seems so much harder who would have thought tiktok would have taken off like it has. Hard to see where the next consumer facing break through will be all the obvious things seem completely sewn up.

The p2p looks pretty solid was always curious about failure rates 5 in 400 seems nice and low.

manonboard

I had a phone call with UB today. Unfortunately they were not interested in lending me more as the reasons they have for releasing equity didnt allow for investment of this nature.

The 2 big rules would be house renovation, or bad loan consolidation.
Both require proof (not that i am inclined to lie tbh).

Disappointed, as its a secure loan, and a bump from 37% ltv to 80% is still well within limits of what was originally my mortgage, and now i have far more income and track history of never missing a payment.

I might try make a meeting with another branch. Any suggestions from anyone about how to change their mind?

pedroeibar1

manonboard wrote: »

I might try make a meeting with another branch. Any suggestions from anyone about how to change their mind?

You are making a typical novice mistake. No regular bank will lend to you on the basis you outline. Lending to a customer to invest in the stock market has always been bottom of the list in what is regarded as good banking practice. A bank’s primary criterion in lending is repayment ability, not security. The latter is a ‘given’ and is looked at only if the proposal is a runner financially. Despite what Anglo was doing with CFD’s for a few specific individuals until 2007 that type of lending never was the norm elsewhere and never secured on residential property.

You do not state if the proposed security is your primary residence or an investment property; if it is the former you have less than zero hope and if the latter an 80% LTV is a non-runner even in the highly unlikely event you find a willing lender (a very faint hope, but not at rates that make sense).

You claim an average 15% return over that last few years, 10% from P2P, so market return must be significantly higher – that is above the market average. It would appear to be a result of luck, as you state (a) 'I dont know much about business/value' and (b) you buy on the basis of what ‘services myself and my friends are using’. Buying shares based on that information is not investing. Basically you have a gambling fund and it should be treated as such until you upgrade your skills. Is this why you have not looked at leveraged products?