Equity Release on PPR > Investment Property

S

scooby

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This is my first posting so if this has been covered previosly just send me in the right direction ! Need some clarification...we have decided to rent out our PPR in Donegal and have a tenant lined up - we have moved back to Dublin. As a result, I understand that such mortgage will now have to change from PPR > Investment . I have a few questions:

Can I release equity on this 'investment' property to either a) fund a 10% deposit on a new house next year which will become our PPR b) on the otherhand,if we happen to raise the 10% ourselves in the meantime can I release equity from 'investment' property in 3-4 years time to assist with the purchase of a larger PPR in Dublin c) if answer is NO to 'a' and 'b' would it be best to look for equity release now before I change the mortgage status to 'Investment' and put the money into Northern Rock/Rabodirect account and leave there ? I am getting mixed messages from EBS on point 'a' when they consider Donegal property as' investment' .....Donegal has mortgage outstanding of 96K and market value is 215K with 14 years left.We are currently renting in Dublin.New house ready next Feb.

Thanks.
 
Hi Scooby,

If your income qualifies you for all the lending you need, then I'd say don't borrow more until you need it.

Don't get too hung up on whether the house is your PPR or an Investment, from a mortgage perspective. Once your income and the value of the house is okay, it doesn't matter a bit to a lender whether the house is your PPR or an investment. Some lenders use the distinction to charge higher interest rates on Investment properties, but others don't. So you should tell EBS that you will be releasing equity on your Donegal house in a while and even though it won't be your PPR then you will not pay higher rates of interest than their best PPR rates. If they don't agree, tell them you'll move all your lending to a lender who will give you all the money you need at PPR rates.

Liam D Ferguson
www.ferga.com
 
This is good information Liam.Much appreciated. I will let you know how my discussion goes.


Scooby
 
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