Inheritance of 189,000

INHERITANCE

I am a 30yr old woman with a 20,000 salary and 4,500 loan which costs me 80 per month. I pay 400 per month rent to rent a small cottage from a family member.
Based on my wage I have been told I can have a mortgage for around 70,000. I have no savings or other capital.
My family decided to give me some early inheritance if 180,000 (I understand about Inheritance Tax) in the form of property. There is a possibility of having 40,000 in the form of investmemts too, although that is not deffinate yet.
In time I would like to extend my house (quoted average of 20,000) which could incease it's value to 200,000-240,000 and also a buy to let property (60-90,000).
Does anyone have any advise about:
If this is possible?
A 'wise' way to plan/do it?
How much money I could borrow based on the value of my property?
Would I be better off with a home owners loan or a mortgage? and how much could that be for?
Thank you.
C

ashenputtel

Hi

I'm not sure your family should be trusting you with all that money!

They're going to give you a house outright that you want to remortgage/secure a loan against and get into BTL!!!

Do you not watch the news?!

regards

Ashenputtel

INHERITANCE

Ideally i would like to get a btl in 12 months from now and get the extension done before that, raising the value of my property.

Catblue

Sorry, I'm a bit confused.

You say you rent a cottage from a family member.

Do you mean that you are going to be gifted THIS (currently rented) house (which is worth £180K) and you then intend to raise a small mortgage in order to be able to extend it?

And then when the extension is done, you intend to remortgage the original house (which will hopefully be worth more than £180K) and get a BTL?

Or am I being dim?

ashenputtel

Hi

TBH, if i were you, i'd have an extension done if you want it done, because you want it done and because it will be of benefit to you. Not in terms of resale value but in terms of your day to day life. Clearly, you come from a financially savvy family who (I assume) have benefitted from HPI. But don't make the mistake of thinking that unless you increase your property's value by extending/developing you're missing an opportunity. This will be your home (I'm guessing) - treat it as such. You don't need to raise it's value - it hasn't cost you anything! Besides, I'd take any valuations now with a pinch of salt, anything could happen over the next few years.

With regards to BTL. I wouldn't even be thinking about that at the moment. The easy money that comes/came with BTL seems very appealing but its also seems to be a ship that many are now deserting...

enjoy your inheritance. don't gamble it.

kind regards

ashenputtel

INHERITANCE

Yes. Ideally that:
Borrow to extend the house, raising the value - remortgage to get BTL flat, hopefullt investing in my future.
Does that sound crazy then? I thought it may leave me in a stronger position seeing as I own my house outright and as I only have 4,500 debt (thought that was much lower that national average).

INHERITANCE

Catblue:
Yes. That's exactly what I want to do!

Doozergirl

Extend when you are ready to, either because you plan to sell on or because you have a growing family. Decide what that house is first before you 'increase it's value' for the sake of it. The idea of increasing the value to borrow even more isn't particularly logical. I wouldn't want to risk every penny on a BTL.

If you own a property outright then I don't see the harm in a small BTL if you do proper research and see it as a full 25 year investment where you have something paid for in the vast majority by someone else I wouldn't look at it as something to sell on within the next 5 or 10 years.

INHERITANCE

I was looking at it in that context, yes.
I was thinking that the BTL would be my pension along with the already owned house and any further inheritance.
The BTL (in 12+mths) can (within reason - taking into account the current financial situation.....) fund itself, leaving me a chance to save from my salary to fund medical cover/holidays/further investments/future kids school fees.
Thank you.

Trollfever

If the BTL is to be a new business venture, I suggest that you prepare a business plan and cashflow forecasts. More info can be found here:

http://www.businesslink.gov.uk/bdotg/action/home?domain=www.businesslink.gov.uk&target=http://www.businesslink.gov.uk/