How should I finance this? Home purchase.
Discussion
OK I'm using an anonymous login for this one for obvious reasons.
Some time ago I was left a considerable amount of funds due to an inheritance.
The wife and I have spotted a nice building site and would like to move and we have no mortgage on our current home (completely paid off).
so my situation is this.
£350k in bank.
Current house worth Aprox £200k. Less for a quick sale.
Current house rental income could be as much as £650pm after insurance, letting agent, local charges ect.
Building site with house built/completed asking price £350000 (to be negotiated).
Wife says.
Sell current house and blow £150k on new house leaving the rest to invest and avoiding all hassle of renting. Or blow £350k on new home and rent out current home.
I say part mortgage. Either the rental or new home but which? Pitfalls????
I've looked at the rates initial 2% for rental, 1% for home both rising to 4% both LTV 60%. I know what the payments will be and would like the rental to pay the mortgage so I wouldn't borrow the full 60% on the home.
All basic sums of course as I have not taken into account stamp duty, solicitor, estate agent selling fees and possible income tax from renting second home.
What would you do?
I'm Clueless
Some time ago I was left a considerable amount of funds due to an inheritance.
The wife and I have spotted a nice building site and would like to move and we have no mortgage on our current home (completely paid off).
so my situation is this.
£350k in bank.
Current house worth Aprox £200k. Less for a quick sale.
Current house rental income could be as much as £650pm after insurance, letting agent, local charges ect.
Building site with house built/completed asking price £350000 (to be negotiated).
Wife says.
Sell current house and blow £150k on new house leaving the rest to invest and avoiding all hassle of renting. Or blow £350k on new home and rent out current home.
I say part mortgage. Either the rental or new home but which? Pitfalls????
I've looked at the rates initial 2% for rental, 1% for home both rising to 4% both LTV 60%. I know what the payments will be and would like the rental to pay the mortgage so I wouldn't borrow the full 60% on the home.
All basic sums of course as I have not taken into account stamp duty, solicitor, estate agent selling fees and possible income tax from renting second home.
What would you do?
I'm Clueless
1. Buy a decent house to live in.
2. Invest the change in something. Possibly a btl, but I wouldn't.
3. How's your pension savings coming along? Plenty of opportunity to sidestep some income tax here.
4. Have you been doing your ISAs? Now £30,000 every tax year aggregate allowance for you and your wife - so £60,00 available between you in calendar 2015.
2. Invest the change in something. Possibly a btl, but I wouldn't.
3. How's your pension savings coming along? Plenty of opportunity to sidestep some income tax here.
4. Have you been doing your ISAs? Now £30,000 every tax year aggregate allowance for you and your wife - so £60,00 available between you in calendar 2015.
BoRED S2upid said:
If you want a BTL then it makes sense to be mortgage free on your home and mortgage the BTL as the interest on repayments it tax deductible if you were mortgage free on both the taxman will want more of your rental income.
+1 makes sense. Another option to throw out there - sell current house, buy new house, use £150k to buy commercial property using a sipp, allow rents to build up tax free until you draw in retirement.
Or remortgage your current house to 75% LTV and use funds as deposits on several BTLs... (Potentially with better yields than this one)
Or if you want an easy life use your isa allowances / sipp in a good global tracker / investment trust / mix of bonds and shares etc etc
Tell us more about your investment goals for better advice...
Edited by trowelhead on Monday 9th February 19:16
Gassing Station | Finance | Top of Page | What's New | My Stuff