A £50k dilemma
Discussion
What would you guys do in this predicament,Have planning for an extension.Costing £50k.Have £50k in the bank.Should I
(a)Spend the £50k on the extension and not increase the mortgage.
or
(b)Get the £50k on the mortgage and put a deposit on a BTL with "my" money.
Currently have £65k mortgage on a £350k house I,m 39.
Would would the money men on PH do.Thanks
(a)Spend the £50k on the extension and not increase the mortgage.
or
(b)Get the £50k on the mortgage and put a deposit on a BTL with "my" money.
Currently have £65k mortgage on a £350k house I,m 39.
Would would the money men on PH do.Thanks
ghamer said:
What would you guys do in this predicament,Have planning for an extension.Costing £50k.Have £50k in the bank.Should I
(a)Spend the £50k on the extension and not increase the mortgage.
or
(b)Get the £50k on the mortgage and put a deposit on a BTL with "my" money.
Currently have £65k mortgage on a £350k house I,m 39.
Would would the money men on PH do.Thanks
Do some proper man maths. Work out what the income from the BTL property would end up being after say 5 years (take into account the value of the house but also the likely mortgage repayments & misc. costs associated with owning a BTL property...then compare that to what a £50k extension could do to the value of your current house & see what comes up trumps? If its the BTL then I'd get a further £50k on top of your current mortgage & use the money from that to build your extension. (a)Spend the £50k on the extension and not increase the mortgage.
or
(b)Get the £50k on the mortgage and put a deposit on a BTL with "my" money.
Currently have £65k mortgage on a £350k house I,m 39.
Would would the money men on PH do.Thanks
It all depends on what interest rates you're paying, and what yield you're expecting from the BTL.
If you're paying 1% on the mortgaged money, and can get a 5% yield (after BTL mortgage payments and other expenses) then it makes sense to go BTL with the money because you'll be earning more than you're paying. You will also have the increase in value of your house, but that you would have either way you went, so is not really relevant.
If you're paying 1% on the mortgaged money, and can get a 5% yield (after BTL mortgage payments and other expenses) then it makes sense to go BTL with the money because you'll be earning more than you're paying. You will also have the increase in value of your house, but that you would have either way you went, so is not really relevant.
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