Capital raising in the Channel Islands

Posted on 23 August 2012 by julie


I have a mortgage on my current house and I have had 2 equity releases on it.  It is currently valued at £500,000 with mortgage owing £67,000 plus the two equity releases, all amounting to roughly £147,000.  I would like to buy a cheap house at £70,000 and want to borrow £60,000 - £65.000.  Do I have another equity release, which is my best option, equity loan, remortgage? Which is my cheapest managable option?  My current home is in the channel islands and the one I am after is in England, I want to rent it out until I retire there thank you.

Julie

I am not familiar with arranging mortgages in the Channel Islands, but the basic mathematics are going to be the same.  Can you remortgage your property and consolidate all your loans into one at a cheaper rate than arranging a third release of equity and leaving the existing loans as they are?  I recommend that you speak to a local independent mortgage broker who can look at your existing loans, check for any early repayment penalties and then research the market to see if he can save you money.

With regards to buying a property in England you may be able to raise up to 75% of the purchase price on the property itself leaving just 25% to find from your savings and/or released from your equity.  I would think carefully about whether you want to raise a mortgage on the UK property or whether you want to leave it unencumbered for your retirement?  You should discuss this with your local mortgage broker.

Peter

Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.