# Housing Equity..



## LeeS3 (Mar 24, 2004)

So I am currently sitting on a substantial equity bubble. Twice the outstanding mortgage.

Is there a good way of unlocking this equity without actually selling the house?

A significant amount of money has been spent getting the current residence to our spec, and I'd be reluctant to lose all that effort. But at the same time would like to unlock some of the money already spent.

Ideally it would be to free up some hard cash or could the current property be leveraged to purchase an additional property?

Ps. my current mortgage is pants. (In that its no frills repayment (expensive) but also has no penalty clauses..)

:-/


----------



## digimeisTTer (Apr 27, 2004)

In one word REMORTGAGE!!
I remortgage every 3 years saved thousands, mind you that is only interest saved, if you want to release equity and you can afford the increased repayments, which it clearly looks like you can, then just look around for a good deal and remortgage, there's obviously plenty of equity there so go for it!

I'm not an IFA (I'm an Estate Agent)  but if you want the name of a shit hot broker PM me, otherwise as said shop around.


----------



## vlastan (May 6, 2002)

We all sit in an equity bubble. So nothing new here. My house too is two times more my outstanding mortgage.

But if you borrow more by taking some of this money, it is not free. you will still have to pay them back to the bank that holds your mortgage. Effectively, you will be increasing your loan, so why do it?

If you dont want to sell and downsize then this money should stay there. A lot of people fear that the housing market will crash like 12 years ago. So they sell their properties now and rent and plan to buy later.

It was reported that the houses are 30% overvalued at the moment and it is time to adjust the prices.

The bank of England is doing silly things as always increasing interest rates. I think another interest rate increase is coming in two days.

You have to think that the market expects the interest rates to go at least to 5.5%. So expect that your mortgage will keep going up not down.

So now is the time to overpay and finish the loan ASAP not increase it.


----------



## Matthew (Oct 6, 2003)

LeeS3 said:


> So I am currently sitting on a substantial equity bubble. Twice the outstanding mortgage.
> 
> Is there a good way of unlocking this equity without actually selling the house?
> 
> ...


Me too. My place is around 4 times my Mortgage. YOu could look into an "Equity Release Loan". HSBC are really good - Variable has no lock ins, not tie ins and a good rate. YOu can overpay whenever you like and bail out with no penalty. At the end of the Mortgage there is no deed release fee either. Current options also have discounted rates for 3,4 or 5 years I believe. I didn't find anyone who could match the rate and the terms and I spent months looking. The guarantee that the laon will never be more than 1% above base.

Not everyone sits in an equity bubble Vlas - Some unfortunate fellows still have the negative equity problem. Granted it's not that many any more but they are still out there.

In the end you borrow all your life - I'm resigned to it and I sleep fine at night. For myself the market would have to devalue my house from Â£400K+ down to Â£96K before my equity even matched my Mortgage; That's a big decrease. Not saying it can't happen but it is a hell of a way away from where we are now.

Getting sound advice from an IFA is a good idea and make sure you shop around. What's good for one is rarely good for another.


----------



## IanWest (May 7, 2002)

Keep remortgaging and buying, then you benefit from an increase several times over. Northern Rock do a good deal where you can remortgage to 80% and then pay the funds back down until you need them. Effectively you have released the money but you do not pay for it until you want to use it.
I'm and Agent as well but my broker is better!  :wink:


----------



## digimeisTTer (Apr 27, 2004)

IanWest said:


> I'm and Agent as well but my broker is better!  :wink:


----------



## jwball (Jan 18, 2004)

IanWest said:


> I'm and Agent as well but my broker is better!  :wink:


Do you not mean "an Agent"?


----------



## vlastan (May 6, 2002)

> Not everyone sits in an equity bubble Vlas - Some unfortunate fellows still have the negative equity problem. Granted it's not that many any more but they are still out there.


Sorry but it is hard to believe that after over 10 years and the recent increases in house prices, that people still suffer.

I don't know of anyone...do you?


----------



## snaxo (May 31, 2002)

vlastan said:


> > Not everyone sits in an equity bubble Vlas - Some unfortunate fellows still have the negative equity problem. Granted it's not that many any more but they are still out there.
> 
> 
> Sorry but it is hard to believe that after over 10 years and the recent increases in house prices, that people still suffer.
> ...


Out of the 55 million people (or whatever it is) in this nation - how many do you know Vlastan?

Damian


----------



## vlastan (May 6, 2002)

From the people that I know I mean of course. Do you know any that still suffer from negative equity?


----------



## snaxo (May 31, 2002)

Nope but I live in a generally affluent area.

Many people do not. Some live in areas where crime has risen and risen for example, probably with their house value declining at the same time. I would think it extremely likely that there are still people out there suffering negative equity.

Damian


----------



## BreTT (Oct 30, 2002)

vlastan said:


> > Not everyone sits in an equity bubble Vlas - Some unfortunate fellows still have the negative equity problem. Granted it's not that many any more but they are still out there.
> 
> 
> Sorry but it is hard to believe that after over 10 years and the recent increases in house prices, that people still suffer.
> ...


Plenty of people on the west coast of Scotland are still in a negative equity trap. In some cases, their houses aren't worth what they paid for them in 1989. Negative equity still exists, whether you choose to believe it or not.


----------



## mike_bailey (May 7, 2002)

My house has also doubled in value and I've got a One Account. I only pay interest on the outstanding balance of the mortgage and last year I bought a place in Spain by simply transferring the funds from the account and the bank didn't even need to know what I was spending the money on (it's my money not theirs of course).

I asked them for a revaluation yesterday which they're happy to do for Â£75 and my mortgage rate will drop from 6.2% to 5.6% and I'll have double the wonga to spend on me next venture.

While the interest rates are higher than regular mortgages I think many disregard them blindly when what you're paying for is being able to control your own money.


----------



## vlastan (May 6, 2002)

Sure OK. I was not aware of this. I just haven't read much in the papers or the internet about negative equity, so I thought it wasn't a problem these days.

I am not aware of any negative equity around here, but I guess it still affects only specific areas within the UK.


----------



## LeeS3 (Mar 24, 2004)

mike_bailey said:


> My house has also doubled in value and I've got a One Account. I only pay interest on the outstanding balance of the mortgage and last year I bought a place in Spain by simply transferring the funds from the account and the bank didn't even need to know what I was spending the money on (it's my money not theirs of course).
> 
> I asked them for a revaluation yesterday which they're happy to do for Â£75 and my mortgage rate will drop from 6.2% to 5.6% and I'll have double the wonga to spend on me next venture.
> 
> While the interest rates are higher than regular mortgages I think many disregard them blindly when what you're paying for is being able to control your own money.


Please explain? I am not sure I understand this?

Are you saying a revaluation means you are effectively putting down 50% deposit and get a lower rate?


----------



## mike_bailey (May 7, 2002)

LeeS3 said:


> mike_bailey said:
> 
> 
> > My house has also doubled in value and I've got a One Account. I only pay interest on the outstanding balance of the mortgage and last year I bought a place in Spain by simply transferring the funds from the account and the bank didn't even need to know what I was spending the money on (it's my money not theirs of course).
> ...


Absolutely, I didn't know you could do this but I stumbled on it when I was looking at the FAQs on the One Account website. It's here...

http://www.theoneaccount.co.uk/onev2/faqs/faqs.html#c2

Perhaps your bank will do the same (may still be worth switching your mortgage though).


----------



## jonah (Aug 17, 2002)

I did this 3 yrs ago for work carried out, sometimes the second mortgage can be better value than the origanal, all depends on what they have on offer. I was tied into my fixed rate for 1yr more but managed to get 15k discounted for two yrs, only provisal was they came round to see the work carried out but was just a formality.
I honestly cant see the point of working all your life and then sitting on Â£150k doing nothing, just enjoy it  
Jonah


----------

