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equity
candyfloss1234
Posts: 3 Newbie
I have sold my own house and rented it out. I have bought a new house with my partner. So we could afford the mortgage, I transferred 40,000 of my equity from my rented property to our new house we have bought together. My partner is now in a position to starting paying in some extra money to eventually match my 40,000. My question is would it be better to put the extra money in my rented property or our new house?
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candyfloss1234 wrote: »I have sold my own house and rented it out. I have bought a new house with my partner. So we could afford the mortgage, I transferred 40,000 of my equity from my rented property to our new house we have bought together. My partner is now in a position to starting paying in some extra money to eventually match my 40,000. My question is would it be better to put the extra money in my rented property or our new house?
Are you married? How long?
If your partner starts contributing to your rented property, they could start gaining a beneficial interest in that property too.. which would make it even more complicated if you break up.
Having said that, from a purely financial perspective, it makes sense to overpay and reduce the mortgage with the highest interest, if you can do without penalty. If your BTL mortgage on the let flat has higher interest, then it makes sense to reduce the mortgage there. Could you treat the £40k you contributed as a £20k contribution + £20k loan to partner. Now if partner is ready to repay that £20k loan to you, you can use that money to pay down the BTL mortgage. Going forward you can equally contribute to the jointly owned house.0 -
Put the money into whichever mortgage has the higher interest rate. Or it may be better financially not to use the money to pay off the mortgages but rather put it elsewhere, perhaps into your pensions.0
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hi, not married, and i made sure in the paperwork my 40,000 in the property was protected. The BTL mortgage as a slightly higher interest but its a tiny difference. Really like the loan idea never looked at it from that point of view.Thank you you have given me some good ideas to consider.0
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What does this mean?candyfloss1234 wrote: »I have sold my own house and rented it out.0
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