Question on how to release capital from my home

Mum_of_3_3

fenderboy wrote: »

Our situation is such that we don't have savings adequate to put up a deposit for any mortgages I've looked into. That is the only reason I'm looking into other alternatives...so how might we manage the v small deposit issue ?

You won't need a deposit, the unmortgaged part of the house will act as a deposit eg your house is worth £200k, you need £50k to buy in Portugal, you therefore have £150k worth of unmortgaged house to use as a deposit.

The thing to remember is that if you default on the £50k in anyway then the whole £200k house will be up for sale by the bank (you will get anything above and beyond £50k back, but you probably won't get any where near £200k for it as people will want a repo-bargain!)

How much is the house in Portugal and how much is your house worth. Some people may be able to help you further.

Tbh I would only buy a property abroad if I had the spare cash, there is no way I would put my home up as collateral against a BTL. Also,you need to look into how you are going to manage the cleaning of the place etc, how will the holiday makers get keys etc? How will you advertise the place (don't take the developers marketing ploy of "We guarantee you 100% occupancy)? What if the holiday makers trash the place? Is there evidence of "Land Grab" in Portugal? Can you afford to lose this money if things go badly wrong?

M_o_3

fenderboy

Mo3, in response;

I own all of my uk home (nomortgage), its current value based on local trends £320-330k.
Property in Portugal(siver coast) £120k Plus fees taxes approx £132k
We've identified a management co. who would clean, keyhold etc.
We're not dealing with a developer but direct to a builder, we also have a solicitor in place.
As for rental our conservative estimate would be for 12 weeks p.a. certainly not expecting 100% occupancy.
Hope this may clarify....please feel free to shoot me down on this !

RobertoMoir

I know some people who did this with a home in greece (about 10 or 8 years ago so well before the 'crash') and did well out of it. They love it there the last I heard from them.

I also know a few people who have tried this and its gone pear shaped. Wasn't there a big thread in one of the forums here about a problem with a company going bust (a company named "amber sun" or something like that?).

BitterAndTwisted

Ambasun in Bulgaria.

arby

i keep reading this thinking it's a joke. Surely nobody is actually still considering buying a foreign property as an investment? If you want to move there in 10 years, why don't you sell your house in 10 years and move there?

ViolaLass

fenderboy wrote: »

Mo3, in response;

I own all of my uk home (nomortgage), its current value based on local trends £320-330k.

fenderboy wrote: »

Clapton, how would I remortgage as my current uk home is 100% owned by me...?

I think what concerns me most is not what you want to do with the money (I don't pretend to know anything about buying abroad so will stay out of that) but the fact that you don't seem to understand the very simple, IMO, premise that if you own your house outright, then you can get a mortgage, which then gives you, say, £50k to deal with as you wish.

If you don't understand that, and your replies indicate that you don't, at least not fully, then do you really fully understand the risks of buying abroad and getting a mortgage on your home in order to be able to do so?

fenderboy

arby wrote: »

i keep reading this thinking it's a joke. Surely nobody is actually still considering buying a foreign property as an investment? If you want to move there in 10 years, why don't you sell your house in 10 years and move there?

Basically we're more concerned with quality of life issues rather than investment potential.

We're not hoping to make a profit, breaking even with mortgage/tax/management/maintenance over this timescale then selling up over here to go there and live when family and career comittments have wound down is our aim.
It would also provide us with a hol home to use in off-peak periods, thus reducing annual hol costs.

As for crystal balling property values either here or in europe I don't think anyone can anymore.

arby

fenderboy wrote: »

Basically we're more concerned with quality of life issues rather than investment potential.

We're not hoping to make a profit, breaking even with mortgage/tax/management/maintenance over this timescale then selling up over here to go there and live when family and career comittments have wound down is our aim.
It would also provide us with a hol home to use in off-peak periods, thus reducing annual hol costs.

As for crystal balling property values either here or in europe I don't think anyone can anymore.

so you claim you're not interested in it as an investment, rather as a quality of life decision for when you go over there in 10 years. So why don't you re-read what i wrote? I said, if you want to move there in 10 years why don't you wait 10 years and then sell your house here and go? It really is a simple decision, and one that you're putting at risk through this ill-thought out deal.

poppysarah

fenderboy wrote: »

Our situation is such that we don't have savings adequate to put up a deposit for any mortgages I've looked into. That is the only reason I'm looking into other alternatives...so how might we manage the v small deposit issue ?

Alarm bells.

You do not have adequate savings to do this the right way so don't do it at all.

What if you need to repair the place? What if you need to suddenly pay some extra bills?

fenderboy

arby wrote: »

so you claim you're not interested in it as an investment, rather as a quality of life decision for when you go over there in 10 years. So why don't you re-read what i wrote? I said, if you want to move there in 10 years why don't you wait 10 years and then sell your house here and go? It really is a simple decision, and one that you're putting at risk through this ill-thought out deal.

I'd be concerned that in 10years the kind of property we looked at wouldn't be available at anything like today's price....and that the relative value of my home in aberdeen would be less. The housing market in aberdeen is v closely linked to the health of the oil industry and by then the bubble would have well and truly burst....