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Hey folks,

I'm after some advice. At the moment I don't have the capital to start investing. I also have a little debt that I am in the process of paying off. My thoughts for obtaining the starting capital is to release the equity from my home. My current mortgage deal ends in 30 months. 

So I was wondering would it be advisable to remortgage early and eat the fees in order to obtain the capital quicker?? At the moment I have a £3,000 cushion from past overpayments that would be more than enough to pay the fees. 

At the moment my house is worth circa £200,000 with my mortgage being £100,000 am I right in thinking you can release equity upto %80 of the value of the property. Using these calculations I estimate around £60,000 of starting capital. 

I understand this a personal choice that needs be made but would just like to hears others thoughts on this. 

Thanks in advance 

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Really good question and one that comes up a lot. Getting started in property investment is always tricky and remortgaging your own home is how many people get started. It's not for everyone though, so do make sure you are comfortable taking on extra debt against your own home and that you'll be able to afford the extra payments going forward etc.
 
Having said that it's probably the cheapest loan you'll ever get, and if it's the difference getting started and not, then it becomes obvious why so many choose to do this.
 
The added complexity for you is that you are still fixed into a mortgage, and you have an early repayment charge to pay if you want to get out early. So, you can either pay £3k now and get started or wait 30 months, so I guess the question is - will you make more than £3k in capital growth and rental profits in that period? As we are in a boom phase- I would very much expect that answer to be yes...
so maybe it's time to suck it up and get started...
 
But before doing anything though - make sure you talk all this through with a good mortgage broker, who will let you know what's possible and what's not. They'll work out exactly how much you should be able to borrow based on your earnings, commitments and equity. All of this will help you decide if its the right thing to do or not. If you don't get the answer, you are looking for though - always check in with a second broker for good measure too. Good luck!

Mark Rocks
Community Builder and Content Writer

www.propertyhub.net

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On 1/21/2022 at 9:59 AM, charles_b said:

Hey folks,

I'm after some advice. At the moment I don't have the capital to start investing. I also have a little debt that I am in the process of paying off. My thoughts for obtaining the starting capital is to release the equity from my home. My current mortgage deal ends in 30 months. 

So I was wondering would it be advisable to remortgage early and eat the fees in order to obtain the capital quicker?? At the moment I have a £3,000 cushion from past overpayments that would be more than enough to pay the fees. 

At the moment my house is worth circa £200,000 with my mortgage being £100,000 am I right in thinking you can release equity upto %80 of the value of the property. Using these calculations I estimate around £60,000 of starting capital. 

I understand this a personal choice that needs be made but would just like to hears others thoughts on this. 

Thanks in advance 

Depending on your mortgage lender you may be able to get additional borrowing on your home without the costs of the early repayment charge, lenders would be typically happy to lend up to 85% for additional borrowing towards a 2nd property depending on circumstances. 

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Thanks so much for the input guys I really appreciate it.

I have a meeting tonight with a broker/adviser so hopefully things go well on that front. 

@Mark Rocks you mentioned that we are in a boom fase. So after just finishing the chapter on the property cycle I was just wondering at what stage we are currently on. I am based in the North East of Scotland and it's seems, especially Aberdeen, that house prices are rock bottom is this now the recovery fase up here I wonder??

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@hatchy_ssc_hotmail_co_uk 

So after speaking with the mortgage advisor/broker last night this is exactly what he suggested we do. Take a further advance to release the equity as our current mortgage rate is so low a remortgage isn't viable. 

I am buzzing at the prospect of getting stuck in this year. The misses and I are both fully on board and going to write out, in paper, our goals. Thanks allot for your reply see you on the other side  

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On 1/28/2022 at 10:16 AM, charles_b said:

@hatchy_ssc_hotmail_co_uk 

So after speaking with the mortgage advisor/broker last night this is exactly what he suggested we do. Take a further advance to release the equity as our current mortgage rate is so low a remortgage isn't viable. 

I am buzzing at the prospect of getting stuck in this year. The misses and I are both fully on board and going to write out, in paper, our goals. Thanks allot for your reply see you on the other side  

Great News, Good Luck

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