Property refinancing for beginners 

I dont understand this

Bingo. That’s how it works!

Watch the big short

I dont understand

Hi Ash, I'm just a random guy. It's been 9 months since you commented on this. How is your journey going.

Hi Ash just another random guy, have you and your brother embarked on your property journey yet? Would love to know how it is going

​@@the_jakwanhey took a new job at work. Doing 60+hr weeks just to get my mortgage hopefully by the beginning of 2025 I should be telling you all I got the mortgage.

How do I do that

@@trishafalcone7687 it’s a scam!

Essentially you can only refinance to the amount the surveyor values the house at, the homeowner cannot personally state the property value, only the surveyor. But let’s say your £100,000 house is valued at £200,000, you can refinance at 75% LTV = £150,000 Let’s say the first mortgage is at 75% LTV which means you put £25,000 down and borrowed £75,000, you then refinanced at new property value of £200,000, minus the existing mortgage owed of £75,000 leaves you with £75,000 in the bank, £50,000 equity in the property and a mortgage of £150,000. If the market has a downturn and let’s say the property value drops back down to £100,000 you will then be in negative equity by £50,000 because if you sold the property at £100,000 you’d still owe the bank £50,000. But you could still pay the £50,000 owed out of the £75,000 you put in mak when refinanced So to answer your question you could just simply keep paying the mortgage and wait, it will rise again eventually but what % depends on inflation and also the area of your property.

@@MistaJayLJ Nice explanation but could you help get my head around this... in your example, after refinancing your debt is much higher. Even if you discounted the £75K extra in the bank you still owe £75K, same as before. So how is this beneficial?

@@MistaJayLJ thank you so much for this explanation!!

Nah he’s right, can’t be taxed on property in the scenario he described

You only get taxed once your liquidate your asset. As far as I’m aware.

Increased capital gains tax after refinancing, in case its sold?

Don’t worry about the tax, how are you going to cover the ICR for the refinance. Most lenders require rental income to be at least 125-145% of the interest repayments. Using samuels example would the rental yield even cover taking the extra refinance capital out the property. Almost zero chance of that with these rates.