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Confusing mortgage options!!
jackjones_3
Posts: 1 Newbie
Hi, newbie here so please be gentle!
My wife owns a house which she bought 6 years ago for £60k and which, thanks to much of the advice on this site, is now mortgage free. We moved out due to work commitments 2.5 years ago (at which point the house was worth approx £130k) into rented accomodation. So far, so good.
Since moving out my wife's property has been rented out and she takes this rental as her sole income (and declares it). We currently intend to keep the family home in rented accomodation for the forseeable future.
In 2 years time I am going to be forced to move yet again (due to work and this time alone as my family is now settled) and so am looking to buy a flat in my new area for around £160k which I would like to rent out until my arrival (in around Jan 09).
My questions are:
1. As effectively a first time buyer, should I buy the flat in my name and get a mortgage in the normal manner (with approx £40k deposit) or should we re-mortgage my wife's property (claim interest relief as a business) and then buy my flat outright? Or would a half-way option be preferable.
2. As we never intend to live in my wife's property again, should we instead sell it before we reach the 3 year CGT cut-off point and start again with my new flat?
3. If we choose to release equity from my wife's property, do we need to place it in both our names prior to using the money to buy a flat in my name (or should we buy the flat in my wife's name also ??!!)?
4. If I do get a mortgage on my new flat does it need to be a but-to-let mortgage even though I intend to rent it for only 1 year (maybe less)?
5. If it all goes horribly wrong (loss of job etc) and we have to sell both her property and my prospective flat, what sort of CGT mess will we have to unravel?
Thanks for taking the time to read this rather confusing thread. Tax efficiency is my prime objective so if there are any other options which I have missed please chip in.
Thanks
Jack
My wife owns a house which she bought 6 years ago for £60k and which, thanks to much of the advice on this site, is now mortgage free. We moved out due to work commitments 2.5 years ago (at which point the house was worth approx £130k) into rented accomodation. So far, so good.
Since moving out my wife's property has been rented out and she takes this rental as her sole income (and declares it). We currently intend to keep the family home in rented accomodation for the forseeable future.
In 2 years time I am going to be forced to move yet again (due to work and this time alone as my family is now settled) and so am looking to buy a flat in my new area for around £160k which I would like to rent out until my arrival (in around Jan 09).
My questions are:
1. As effectively a first time buyer, should I buy the flat in my name and get a mortgage in the normal manner (with approx £40k deposit) or should we re-mortgage my wife's property (claim interest relief as a business) and then buy my flat outright? Or would a half-way option be preferable.
2. As we never intend to live in my wife's property again, should we instead sell it before we reach the 3 year CGT cut-off point and start again with my new flat?
3. If we choose to release equity from my wife's property, do we need to place it in both our names prior to using the money to buy a flat in my name (or should we buy the flat in my wife's name also ??!!)?
4. If I do get a mortgage on my new flat does it need to be a but-to-let mortgage even though I intend to rent it for only 1 year (maybe less)?
5. If it all goes horribly wrong (loss of job etc) and we have to sell both her property and my prospective flat, what sort of CGT mess will we have to unravel?
Thanks for taking the time to read this rather confusing thread. Tax efficiency is my prime objective so if there are any other options which I have missed please chip in.
Thanks
Jack
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