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Remortgaging / Equity Release

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  • 24-07-2021 8:49am
    #1
    The Mighty Quinn
    Registered Users Posts: 1,228 ✭✭✭


    Finding it difficult to find information about this online and don't want to start formal talks with a bank just yet.

    Outstanding mortgage is 146K. Bought house for 180K four years ago.

    In the current mad climate, last neighbouring house sold for 210K last year and one for sale at present is under offer at 230K.

    Taking the valuation of my place as 210, going on confirmed last sale prices for identical house, is my LTV 147/210 = 70%?

    Or is it 147/180 = 81%?

    From what I can find it seems my LTV can't exceed 90% if I'm to release equity from the house? At a valuation of 210K this would let me access 40K or so.

    We're looking at remodelling the house, doing kitchen and converting attic, changing some windows and doors.

    I'm just not sure how it all works. A loan for the works is too expensive to manage the repayments over 7 years. 40K over 5 years with BOI is an additional 800 a month or so.

    While this would mean the owed money is gone in 5 years rather than the 31 left on the mortgage, it makes it much more manageable expense if remortgaged.

    Anybody any insights or calculator links etc?



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    #2
    Colm82
    Registered Users Posts: 52 ✭✭Colm82


    Just through this process with boi. For equity release you are treated as a second time buyer so need to maintain 20% equity in the house rather than 10% as a ftb.


    If your house is valued at 210k then 80% of this is 168k minus what you currently owe of 147k means you can release 21k. If house is valued at 230k then 80% of this is 186k minus 147k means you can release 39k. Rules of affordability and 3.5 income ratio still apply to combined mortgages.


    My advice if you plan to go ahead with it is to get your house valued by one of the valuers on the banks approved list and find the true value, costs 150 euro but makes the process much easier as you know exactly what you can apply for at the start of the process.


    Fwiw the process was much more difficult and frustrating than than the original mortgage! Boi asked for things at the end of the process that they never asked at the start including engineer certificatation and approval of drawdown which cost 3k we were not expecting!



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