ADVICE for WHEN YOU WANT TO

Release Equity

Releasing equity from your home is a way to borrow money for a specific project or event, such as home improvements, paying for your son or daughter’s wedding, settling debts to reduce your monthly outgoings, or anything else that you’re looking to achieve.

Mortgage Advice Firm specialises in helping homeowners to release equity from their homes and offers tailored advice for staying in control of personal finances. We do this by offering clear explanations of how it all works, up-to-the-minute guidance, and expert recommendations designed around your individual circumstances and goals. If you’re based in Hull or East Yorkshire, get in touch with our team of specialists today.
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Think carefully before securing other debts against your property; your property maybe repossessed if you do not keep up repayments on your mortgage.
Mortgage Advice Firm usually charge a fee for mortgage advice. The amount of the fee will depend upon your needs and circumstances. This will be discussed and agreed with you at the earliest opportunity. Typically, our fee is £399.00 and is payable on Mortgage Offer.

Your guide to releasing equity

Releasing equity can be a tricky process to navigate, so we’ve put together some of the most frequently asked questions with straightforward answers.

For more advice on equity and how to release it from your home, get in touch with our team of advisors today.

common QUESTIONS
What is equity?
What does releasing equity from my home mean?
What can I use the money for?

What is equity?

Equity is the difference between your mortgage balance and the value of your property.

Here’s an example of how to calculate your equity: £200,000 (property value) -£125,000 (mortgage balance) = £75,000 equity within your property

What does releasing equity from my home mean?

Essentially, releasing equity from your home is a way of borrowing more money. This money is secured against your property, so you need to be certain that you can make the repayments each month.  

To release equity from your home, you need to fully understand that your Loan to Value, credit profile and lending capacity greatly impact how much you can release.

Here’s how to calculate Loan to Value:

  • Loan to Value = amount of mortgage ÷ value of the property x 100
  • Example: £200,000 (value of property) - £20,000 (10% deposit) = £180,000 (amount of mortgage)
  • £180,000 (amount of mortgage) ÷ £200,000 (value of property) = 0.90 x 100 = 90% Loan to Value

It’s very important to understand your Loan to Value, as reducing the equity within your property could impact the rate of interest available to you. If it’s proving confusing or daunting, get in touch with our friendly mortgage advisors today.

What can i use the money for?

This is a very common question, as our clients want to know what releasing equity in their homes can help them to achieve. The most popular reason for releasing equity is home improvements, which could be an extension, loft conversion, the building of a summerhouse in the garden, a new kitchen or bathroom, upgraded doors and windows, or simply redecorating your home to match your current style.

It’s not always home improvements though, as other reasons for releasing equity include paying off debts, gifting funds to a relative, and helping a child by paying for their wedding or giving them a lump sum towards buying their first home.

Another reason is when a homeowner bought their property via the government’s Help to Buy scheme and wants to release equity to pay off the loan. In other words, it’s all down to your personal circumstances and what you’re looking to achieve by releasing equity in your home. To find out more about releasing equity, get in touch with our fully qualified mortgage advisors today.
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