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Buying a second property using equity from my first propert

lishad
Posts: 25 Forumite
Hi I recently found out that there might be a way to get a second property using equity from my existing property. First I was planning to sell and buy a better place but now I am thinking to get a second property and keep my place as a rental income. Mortgage is paid off and want to know how and where I should start. I am aware about 3% stamp duty but in the long run I will be saving more money from the rental income of one property. Should I go direct to bank to ask about this or mortgage broker? Thank you.
My property is worth around 350-375K. What I want to buy for myself is around 450-475k. What are the pros and cons?
My property is worth around 350-375K. What I want to buy for myself is around 450-475k. What are the pros and cons?
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Comments
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I guess you also have a large deposit? you say you will make money from renting but what about the mortgage payments and all the other costs0
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Mortgage broker.
Plus read
** Tenancies in Eng/Wales: Guides for landlords and tenants This thread is intended to provide information to both landlords and tenants relating to Assured Shorthold Tenancies (ASTs) in England and Wales.
Topics covered:
* Repairing Obligations: the law, common misconceptions, reporting/enforcing, retaliatory eviction & the new tenant protection (2015)
* Deposits: payment, protection and return
* Ending/renewing an AST: what happens when a fixed term ends? How can a LL or tenant end a tenancy? What is a periodic tenancy?
* Rent increases: when & how can rent be increased?
* Repossession: what if a LL's mortgage lender repossesses the property?
* New landlords: advice, information & links
* Letting agents: how should a landlord select or sack?0 -
I am aware about 3% stamp duty but in the long run I will be saving more money from the rental income of one property.
This is not necessarily true.
All you will be doing is borrowing (through remortgaging) to raise money. It is not guaranteed that the rent you receive will cover the mortgage payments plus the cost of running the property plus the income tax you will pay on the rent.
You need to assess this from a hard-headed investment perspective. Separate the act of borrowing money from what you do with the money.
If you were to receive this amount of money from any other source, what would you do with it? Buy a second property? Put it in a savings account? Build your pension? Invest in stocks an shares?
There are many investment options, buy-to-let is only one of them.0 -
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Thrugelmir wrote: »How much can you afford to borrow? Ultimately will boil down to cashflow and the ability to withstand financial stress.
Not sure how much I can borrow but I am in the first stage of seeing my options ... maybe 200K0 -
There are many investment options, buy-to-let is only one of them.[/QUOTE]
what other investment can bring money monthly so I won't rely on my wage only in 10 years time.0 -
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I hope you can afford to pay two mortgages without any rent coming in. If you tenant stops paying rent you many need over 6 months to get possession through the courts and their may be no rent paid during this time.0
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