Leverage equity out of your home

[cr1ckett]

Hi guys
Looking to become to property developer and have seen a number of great opportunities.
Now, the thing is that I've got a small/medium sized mortgage but have in excess of £800k equity stored in the property doing nothing.

Is there a way of leveraging the equity out of the property without remortgaging?

 

[Nicholas Wallwork]

Hi @cr1ckett welcome to the forum!

Yes there is!

One way (simplest) would be to take a second charge loan against the property. This is a second loan that sits behind the primary mortgage. The rate is usually a bit higher than your primary mortgage for the increased risk of this lender being 2nd in line if you defaulted and the property sold to repay their capital.

Another option might be to find a deal you want to buy and take a bridge loan out on that. Often (and especially as a newbie) you'll need an other asset as a guarantee so this is a way you could provide that. A number of bridge loans go up to 100% with this additional security. Rates are again higher still at around 1% per month + in/out fees...

Asking your existing lender for a further advance would be my first port of call though. Is there a reason you can't or don't want to try that first? Why don't you want to remortgage?