Posted on 14 April 2010 by James Lord
I have just purchased a property at £66,600 with a mortgage of £49950 and paid the remaining 25% deposit cash. The property is worth around £80,000, making a difference of £13.4k. how easy it for me to take out this remaining equity to use for purchasing my next property?
This is going to depend on why you were able to buy your existing property at below market value and how long you have owned the property.
Lenders are very wary of agreeing remortgages where you have owned the property less than 6 months and of sudden increases in value soon after purchase. There are a variety of reasons for this, but the main ones are Anti Money Laundering regulations and Mortgage Fraud.
That said, there are a few Lenders who will consider an application and it might be possible to approach your existing Lender and request a further advance or second home loan. You need to be aware that by taking out all the additional equity you will increase your overall debt to value to around 79% and it is likely that any new borrowing will be on a higher interest rate than your current mortgage.
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