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Is this a good idea? adding onto rental hse mortage to get out of debt
Timo76
Posts: 1 Newbie
Hi all
I have a question that I'd like to get peoples thoughts on; but first brief reasons.
Hubby & I bought 1st hse 13 yrs ago, when we moved we never sold it....we rented it out...pension for the future etc
The hse were in now...did it up from scratch etc...have had 2 kids (<5yrs) since. I was made redundant from v good job 3 yrs ago, lucky to get another job but half the salary. So we've struggled on over the last 3 yrs but despite cutting back on everything poss we have built up some debit, 4k in overdraft, 10k in credit cards. This is mainly down to using Card for me to do a Msc and overdraft is various but until both our children are in school £900 per mth on childcare....which is more than our mortgage.....so we've decided to sell our other hse....only on market 3mths. We have approx. 100k profit in other hse.....we know we have to take various off this....plus tax....part of our large over draft is due to the fact that we were trying the sell the hse empty....so were paying mortgage and c. tax on it as well as our own hse. We now have a tenant in, and its also up for sale, TBH its 2 bed hse in a nice village near a uni...so type of hse either a 1st time buyer or investor would buy
Would we be silly to add 30k onto this rental property now, as in b4 it sells, so basically taking out a chunk of the equity now to use (paying back debts, new windows and rest for childcare) ....so in some ways we're taking a safe amount out....as know the value of hse has doubled, but enough to get us out of vicious circle of cards and OD ...until it sells so we can then reduce our mortgage.....and in some ways when the hse does sell they'll be a smaller figure for us to pay capital gains tax on
Hope the above question makes sense
Thanks all
I have a question that I'd like to get peoples thoughts on; but first brief reasons.
Hubby & I bought 1st hse 13 yrs ago, when we moved we never sold it....we rented it out...pension for the future etc
The hse were in now...did it up from scratch etc...have had 2 kids (<5yrs) since. I was made redundant from v good job 3 yrs ago, lucky to get another job but half the salary. So we've struggled on over the last 3 yrs but despite cutting back on everything poss we have built up some debit, 4k in overdraft, 10k in credit cards. This is mainly down to using Card for me to do a Msc and overdraft is various but until both our children are in school £900 per mth on childcare....which is more than our mortgage.....so we've decided to sell our other hse....only on market 3mths. We have approx. 100k profit in other hse.....we know we have to take various off this....plus tax....part of our large over draft is due to the fact that we were trying the sell the hse empty....so were paying mortgage and c. tax on it as well as our own hse. We now have a tenant in, and its also up for sale, TBH its 2 bed hse in a nice village near a uni...so type of hse either a 1st time buyer or investor would buy
Would we be silly to add 30k onto this rental property now, as in b4 it sells, so basically taking out a chunk of the equity now to use (paying back debts, new windows and rest for childcare) ....so in some ways we're taking a safe amount out....as know the value of hse has doubled, but enough to get us out of vicious circle of cards and OD ...until it sells so we can then reduce our mortgage.....and in some ways when the hse does sell they'll be a smaller figure for us to pay capital gains tax on
Hope the above question makes sense
Thanks all
0
Comments
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It doesn't make sense to refinance the property if you are intending to sell. The fees would make that financially insane.
It would not in any case affect the CGT which is based on selling price vs purchase price, nothing to do with mortgage finance.
Just price the property to sell.0 -
If a house is unfurnished then you can apply to be exempt from council tax, which is what we have done. Cannot comment on anything else though. Good luck!0
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Can you not just remortgage the investment property?
Use the equity released to clear down your personal debts.
Obviously make sure the numbers stack and you are in positive cash flow on the rental property.0
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