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hibbsey

Need advice tapping into equity on my residential mortgage

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Hi everyone, I’m a 28 year old from Jersey and looking for advise from some wise people out there. 

About two years ago I bought my first property worth £540,000 with a deposit of £270,000, at the time with no experience in property investment and very little knowledge, (as you can tell :) ). Knowing what I know now I would have done things very differently, but no regrets. 

My question is, I’m on a 5 year fixed mortgage at 2.24% with a very large amount of equity in the property, how can I get into that equity to use to invest in more property, I know there’s different ways but if anyone can point me in the best direction that would be great. 

 Thanks in advance! 

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The only way you can get at your equity is to remortgage & as you are only 2 years into a 5 year deal there will be penalties to pay. Check on your mortgage what these penalties are before going any further since this will make a big hole in any potential profit.

Might be best to find a different way to fund a deposit for the next property purchase & look to remortgage at the end of your 5 yr term.

Good luck :) 

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On 2/28/2019 at 4:13 PM, hibbsey said:

Hi everyone, I’m a 28 year old from Jersey and looking for advise from some wise people out there. 

About two years ago I bought my first property worth £540,000 with a deposit of £270,000, at the time with no experience in property investment and very little knowledge, (as you can tell :) ). Knowing what I know now I would have done things very differently, but no regrets. 

My question is, I’m on a 5 year fixed mortgage at 2.24% with a very large amount of equity in the property, how can I get into that equity to use to invest in more property, I know there’s different ways but if anyone can point me in the best direction that would be great. 

 Thanks in advance! 

As mentioned get your agreement out and have a look at what the penalties could be.  They normally start at say 2% and then decrease for every year.  You may be really lucky and find that you do not have any penalties at all.

Lets say however that you do have a penalty... work it out what it will cost.  If it does cost you 2%, then what % return would you get investing in something?  Personally I would just bite the bullet and do it, the amount of money that you would potentially be losing by waiting a few years would put a small fee into a different light.  bets way is to sit down with a piece if paper, a pen and a calculator and crunch the numbers.

 

Darren

 

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