Multiple Houses, advice needed any FA's out there ??

BurntOut

Hi Guys

Not being very savvy in this field I thought I would ask this question to the more knowledgable amongst you all.

Myself and my partner are originally from opposite sides off N.Ireland, but we live in Belfast as this is where we both work.

I have a property in my hometown which is rented out through an agent.
My Partner rents a property in her hometown and owns the house we live in, in Belfast.

With a child on the way (and having no family in the city) we would like to move closer to one off our hometowns to be near family who could help with the child etc.

We where thinking of now renting the property in Belfast and buying a home together (first one together), closer to one off our hometowns.

How does it all work, we'd potentially have 3 houses on rent and one that we would want to buy together.

Can this even be done or with all our current properties being in negative equity, would us purchasing a home together just be a pipe dream right now???

I appreciate your help guys.

Thanks:beer:

ACG

Do you have a deposit in place to purchase the new property? You will need atleast 10% if not more.

What your after should be fine but to be honest we (as in advisors) would need to get a lot of information from you in order to give you a more definitive answer.

In order to save you time, your probably much better booking an appointment with a mortgage advisor - they can do a complete factfind and get all the info they will need in one go.

00ec25

obviously your new home together will be on a residential mortgage which require a "normal" deposit - I doubt anything better than a 95% mortgage is available so if you do not have the ready cash to cover at least a 5% deposit (plus fees associated with the purchase) then yes it is a pipedream. Even a 5% deposit may mean your mortgage rate is penal - best rates don't start till you're up to 15 - 20% deposit territory

As you state there is no equity in any of the 3 existing houses, even if you sold one or more of them, all that would do is crystallise the debt that had to be paid off on their sale leaving you needing to raise money to clear that rather than fund the deposit on the together home. So selling up may make your position worse

either you have cash or you don't, if the latter then forget it

kingstreet

A "second" property will typically need at least 15% deposit (Nationwide) or 20% (Abbey/Santander). There may be odd lenders prepared to offer 90%.

Some lenders will ignore a let property in the background as long as it is a self-financing, others will want to "tax" your income as they would any other credit commitment, in case of voids when you have no tenant.

First thing is, establish if you can obtain consent to let on the property you'll be vacating, then ask yourself if you have the deposit.

It would be helpful if you could use the word "let" to describe being a landlord letting a property, and "rent" to describe a tenant's occupation of a property. Otherwise it can give rise to misunderstandings with a situation as "involved" as yours...

ognum

I just need to ask this question, why if you have three properties in negative equity do you believe buying another property is such a great idea?

Maybe I'm missing something!

ACG

To the above...

I they rent, then the money is dead money each month anyway. If they buy then atleast its paying off a mortgage. As the existing properties are being rented out then atleast theyre making a dent into the mortgage each month and at some point it will return then with a profit - unless something goes drastically wrong.

NI felt the recession in the housing market more than anywhere else in the uk i think. Any future purchases are unlikely to result in a loss

saverbuyer

ACG wrote: »

Any future purchases are unlikely to result in a loss

You obviously don't live in NI.

ACG

Your right i dont, however i used to look after about 50-60% of the biggest IFA and Mortgage Advice firms over there. I still speak to a fair few of them and a lot of those do property development. I do have a pretty good idea of the market and how business is going.

I also know that one of the people who still looks after NI has a target which has doubled in 2 years since i left, so there must be a fairly decent outlook over there.

saverbuyer

ACG wrote: »

so there must be a fairly decent outlook over there.

Ehh No, not really.

The target has probably gone from the lowest ever to the not so lowest ever.

Transaction levels are 70% off 2007 so your friends probably aren't doing that much business. We also don't really have a broker culture over here. The market isn't doing much but dropping double digit every year.

ACG

The NI target was bigger than that of the NW, NE, SW, or Scotland. The only 2 areas that had bigger targets were SW and London.

The people i know are still in business and not on the breadline so i would say there is still a healthy enough appetite there.

Anyway, we digress from the original post.

saverbuyer

ACG wrote: »

The NI target was bigger than that of the NW, NE, SW, or Scotland. The only 2 areas that had bigger targets were SW and London.

The people i know are still in business and not on the breadline so i would say there is still a healthy enough appetite there.

Anyway, we digress from the original post.

biggest IFA and Mortgage Advice firms over there

I'd doubt that because our "biggest" is going to be tiny. I think the biggest mortgage advice firm is the mortgage shop. With a whole 20 outlets. I can assure you. They are not busy.

NI has the largest number of repos in the UK. Plenty are on the breadline. As you say, we digress.

Anyway for the OP. I wouldn’t even bother with this idea. Taking on another liability is a stupid idea. Interest rates are low, you’re already at the mercy of you current lender with regards to interest rates rises (unless you have money saved) why would you want to purchase another deprecating asset. The outlook for NI is not a rosy one. Just pay down you debt.