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Remortgage or to Sell?
FUBU05
Posts: 3 Newbie
Hi guys,
first post on the forum and was hoping for some advice.
To cut a long story short.
I own a flat that has a remaining mortgage of £155,000 and an asking price of £260,000. Based of recent purchases in my area i am confident it would sell at this price.
Ive recently had an offer on a property accepted for around
£470,000.
I have 2 options:
1. Remortgage my existing property and take around £35,000 out as equity to help aide the deposit on the new property. If i clear the majority of my savings account out (approx £60k) and add this equity from the remortgage to it, i will have enough for a decent deposit as well as other fees related to the new property. I would still have around £15k in my savings account after. I should also be able to make around £300 a month off rent for the existing property but would look to plow this back into the property as on a Let to Buy mortgage it, would only be on interest only.
2. Sell the existing property and use the £100k approx to put down as a deposit on property number 2. This allows me not to touch any of the savings in my bank and reduce my mortgage by a bit on property number 2.
I am a little confused of which option to take. Both properties are in London but with all the talk of the London House market having peaked, i am a little confused with what to do. A lot of cash in the bank is nice as security but at the moment cash in the bank is making me nothing. investing it in bricks and mortar long term seems the right thing to do but is this the right time to cash out on property 1, buy property 2 whilst holding savings in the bank?
Your thoughts and advice would be much appreciated.
first post on the forum and was hoping for some advice.
To cut a long story short.
I own a flat that has a remaining mortgage of £155,000 and an asking price of £260,000. Based of recent purchases in my area i am confident it would sell at this price.
Ive recently had an offer on a property accepted for around
£470,000.
I have 2 options:
1. Remortgage my existing property and take around £35,000 out as equity to help aide the deposit on the new property. If i clear the majority of my savings account out (approx £60k) and add this equity from the remortgage to it, i will have enough for a decent deposit as well as other fees related to the new property. I would still have around £15k in my savings account after. I should also be able to make around £300 a month off rent for the existing property but would look to plow this back into the property as on a Let to Buy mortgage it, would only be on interest only.
2. Sell the existing property and use the £100k approx to put down as a deposit on property number 2. This allows me not to touch any of the savings in my bank and reduce my mortgage by a bit on property number 2.
I am a little confused of which option to take. Both properties are in London but with all the talk of the London House market having peaked, i am a little confused with what to do. A lot of cash in the bank is nice as security but at the moment cash in the bank is making me nothing. investing it in bricks and mortar long term seems the right thing to do but is this the right time to cash out on property 1, buy property 2 whilst holding savings in the bank?
Your thoughts and advice would be much appreciated.
0
Comments
-
The first option would probably be the easiest at the moment, releasing the equity for your deposit and renting the property out to make an additional income would be beneficial.
If you are saying selling the property would be easy in your area, then why not wait.0 -
If you can afford to keep it keep it.
You don't sell assets that appreciate unless you have to0 -
average Joe and Martin, thanks for the response.
I guess, although i consider myself to be living in a relatively desirable part of greater London, i guess the news circling about corrections and reductions in the house market do make you a little worried. So that was my only consideration for cashing out.
In terms of simplicity, selling or remortgaging i don't think would be too problematic0 -
Can you afford 2 mortgages if your tenant does not pay the rent!0
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