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 Raising money for a business venture

Q I need to raise ?60,000 for a business venture. Our house, which is worth about ?650,000, has no mortgage. What would be the best way to use it as a collateral to raise ?60,000 required. I am retired with an annual income of ?60,000 from commercial property.

JM

A Banks tend to charge an arm and leg for business venture loans-and insist on all kinds of conditions, including probably a charge on your house. It seems sensible to me, therefore, to take out a mortgage on your house to raise the money.

The interest rate will be considerably lower and there are some good bargains around at present. You should have no difficulty, in view of the value of the property and your income, although the period of the loan may be constrained by your age.

If you take out an interest only loan you can repay it at any time provided there is no fixed rate for a specified period. I have no details about the proposed business set-up, but there might well be a way for the mortgage interest payments to be offset against the profits.


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