The equity in your home is yours, use it!
Hi, this is Ceri…
Relax FCA, I’m not about to tell people to rush out and take a 90% loan to value mortgage to fund their best mates wedding…
But, could you re-mortgage to fund a wedding, if you wanted to?
YES!
What’s an acceptable reason to release equity?
Here’s the secret about the equity you’re slowly building into your home – it’s yours, you can use it.
The list of acceptable uses is as long as your imagination, providing they’re
- a) legal
- b) justified and
- c) affordable.
The lender would need to agree of course, but many lenders are very flexible when it comes to client releasing equity for a whole host of reasons.
At Remoo Mortgages, we’ve worked with loads of clients who’ve released equity from their property for all sorts of reasons, including paying for weddings, cars, family holidays and even a Lions tour. The benefit of using the equity in your home, whether through moving to a new lender or taking additional borrowing from your current lender is that, in theory, you spread the payments over a longer term than a personal loan.
So if you’ve always dreamed of doing Route 66 or you fancy a Grand Designs-esque mega extension, then you could ask your lender or a new lender to fund it, and in the majority of the cases they would.
Is it worth it?
Ultimately, this may cost you more in the long term, but be more affordable and fit within a set budget in the short term. I guess, just like the scales on the Statue of Liberty (you could go there!), it’s all about balance and making a judgement about what is and isn’t affordable.
We can help you with this by providing projections of what the additional borrowing may cost you over the term of the mortgage. Plus, our lifetime service means we’re always on hand to offer additional advice in the future. You could even consider taking additional borrowing over a shorter term than that of your existing mortgage, to help mitigate the long term cost of the additional borrowing. Or even reducing the term of the whole borrowing to really offset the cost of increasing your mortgage.
There are some reasons that most (but not all) lenders probably wouldn’t lend on. These tend to be things like gambling debt or tax bills. But even if you are in this situation, reach out and we’ll see if we can help.
5 reasons to release equity from your home
1 – Home Improvements
Lenders love home improvements. Want to convert the loft, the garage, add a single or even double-storey extension? Need a new kitchen, bathroom or en suite? These are the most typical reasons for releasing equity for home improvements, and almost all lenders would be happy to help.
2 – Gifted Deposits
I would say that in the last few years 90% of my clients who have bought their first homes, no matter what age they are, have had a gifted deposit from a family member. It feels like a lot of the wealth and (by association) housing stock, is stuck in the hands of older generations. But one fantastic way they can help family members, or even friends who are looking to buy, is by releasing equity to gift as a deposit on a new home.
3 – Life Events
Weddings, Family Holidays, even divorce – you can release equity from our home to pay for the good and not so good that life throws at you. Whether it’s a huge family celebration or even just to get rid of the ex!
4 – Holiday Homes
Not the bricks and mortar type. Local houses are for the local community (I’m sure you’ll hear more from me on this in the future). But if you wanted to buy a caravan, chalet or even a motor home, you can release equity to help you achieve those dreams.
5 – Debt Consolidation
If you’re from the FCA, please look away… You can use the equity in your home to repay your existing unsecured debt and help reduce your monthly outgoings in the short term. With the cost of living sky rocketing, we are finding more and more clients who are looking into this.
Advice on Debt Consolidation requires extra permissions, which we at Remoo Mortgages have. So if you’d like to speak to us about this, or releasing equity for another reason, just click here to get in touch.
The legal bit:
By consolidating existing debt please remember that although you may achieve short term savings it will result in extending the term of the loan and in turn increase the total cost in most circumstances. You are also securing a previously unsecured debt against your home.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it.