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Calculate Cash Released on Refinance


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Hi There!

I am trying to calculate a deal for a FHL purchase, using bridging finance for 3 months, including a topup for refurb. Post works the property would be financed via a standard FHL mortgage. 

PP: £350K
Deposit 30%: £105K
Bridging Loan: £245K (70%) + £25K refurb = £270K loan
Cost of finance: £8.1K
Reval: £425K

How do you work out the cash released on refinance?
Is this the same as "Equity Gain" or not as that takes into account all other costs?

Thanks for any help!



 

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Not sure if im missunderstanding your question, but assuming you remortgage to 75%, you will have a mortgage of £318,750 and will have a mortgage to redeem of £278,100 (loan + cost) giving you cash after remortgage of £40,650.

You initially invested £130k, you have equity of £106,250 now and you have cash on hand of £40,650, so your net worth is £16,900 better?

043_logo_final_03.png.0cdf828351f81e6097208048ac2d018d.pngStuart Phillips

Independent, Whole of Market Mortgage Broker

AALTO Mortgages Ltd

Web  www.aaltomortgages.com

Email  sales@aaltomortgages.com

Call  020 7183 1101

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2 minutes ago, Stuart Phillips said:

Not sure if im missunderstanding your question, but assuming you remortgage to 75%, you will have a mortgage of £318,750 and will have a mortgage to redeem of £278,100 (loan + cost) giving you cash after remortgage of £40,650.

You initially invested £130k, you have equity of £106,250 now and you have cash on hand of £40,650, so your net worth is £16,900 better?

Hey Stuart - thanks for speedy response. The bit I am getting tripped up on I think is... where did you get "you initially invested £130K" from, assume you're adding the 25K cash for refurb from my bridge to the deposit?

Why I find it confusing slightly is that the £25K isn't my money as such for the refurb, I'm borrowing as part of the loan, so thought the only cost to me is the £8.1K finance cost. Making my "initial investment" £105+£8.1K = £113.1K? Not sure.

Cheers

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Sorry, my misunderstanding. I assumed the £25k was your cash, not borrowed. So in that case its more like:

Final mortgage = £318,750

Bridge to redeem = £278,100 (70% bridge + refurb topup + interest & fees)

Cash out afterwards = £40,650

 

Equity is £106,250 and your cash is £40,650, which means youve increased your net worth by £41,900.

043_logo_final_03.png.0cdf828351f81e6097208048ac2d018d.pngStuart Phillips

Independent, Whole of Market Mortgage Broker

AALTO Mortgages Ltd

Web  www.aaltomortgages.com

Email  sales@aaltomortgages.com

Call  020 7183 1101

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