Can I remortgage my house for more than its worth?
Mogseye’s answer is good here – just a note that insurance has nothing to do with this. Your insurance will pay the rebuilding cost of your house in the event of a total loss, but a mortgage is based on the market value of your home. As noted house values are not rising at the moment so you would be unlikely to be offered a higher value loan (the security, your home) is not enough to cover the loan. Three years ago you probably could have got one if prices were racing up in your area. Unless you really know your stuff it’s maybe not a good time to get in to property developing, but what I would say is a lot of successful people get their breaks in tough times like now – capital isn’t as easy to come by, but with a lot people needing it, if you CAN get it, maybe you can do some good deals. Not sure where you can get the cash though unless you’re comfortable running a pyramid scheme.
You can’t mortgage a property for more than it’s worth. I doubt that anyone will lend you £100,000 when you only have £10,000 worth of equity in your home. certainly not for you to risk it all on property developing. Property development is by no means a safe bet in the current economic climate – having a finished property that is worth £150,000 means nothing if no one actually wants to buy it. I think you really need to think again – without capital or collaterall this idea is a non-starter. Just to pick up on what Paul B said, yes your Insurer would cover the rebuilding costs of your property – as long as you had insured the property for the correct amount. If you are under insured then you would not get full rebuilding costs in the event of a total loss.
