Building a property portfolio
I have equity in my property. Is it possible to use this to fund more purchases?
Over the past years the return on property has been exponential. Clients have seen the value of their home double since the mid 1990s. Releasing equity from your property via a remortgage is the best way of raising capital and expanding a property portfolio.
Equity is the difference between the value of your property and the debt secured on it. If your property value increases and your mortgage debt is gradually reduced, this difference grows and you can access this extra cash by a remortgage. In financial jargon it is called leverage.
It is better to remortgage rather than take out a loan as the interest rates are much lower and the monthly cost much more favourable. Borrowing extra capital by a remortgage means that it takes a longer time to pay off the debt as the term is longer than that of a personal loan. One way to counter this is by taking out a flexible mortgage where the additional borrowing can be paid off through overpayments, so you can pay this extra off over the same term as you would to a personal loan but at a much lower rate.
Many clients are now buying properties in an emerging country where do not really offer mortgage facilities for UK nationals, then a remortgage is the best and cheapest option. Multiple buy to let properties can be bought if you use the capital as a deposit and then get a traditional buy to let mortgage. You can even remortgage when considering financing the deposit and stage payments for an off-plan purchase.
Think carefully before securing other debts against your home.
Your home may be repossessed if you do not keep up repayments on your mortgage.
The overall cost for comparison is 7.1% APR. The actual rate available will depend upon your circumstances. Ask for a personalised illustration. There may be a fee for the mortgage advice. The precise amount will depend on your circumstances, but we estimate it will be 1.5% of the loan amount with a minimum fee of £500 added on to the loan.
Mayfair Consulting Limited is an Appointed Representative of The Mortgage Times Group Limited, 279 Tottenham Court Road, London , W1T 7RJ , which is authorised and regulated by the Financial Services Authority no. 303007.
