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Should I pay some off Mortgage or keep for an investment?
whiskywhisky
Posts: 319 Forumite
Hi All
I am in a little struggle thinking over what to do. I have 1 property (worth around 100k with no mortgage) which is rented out at £500/month. I live in a house worth around 140k, with a 100k mortgage. In hindsight I should have sold the rented property last year.
Anyway I earn 30k - I have a family and my wife is a housewife. I am not concerned about having money for a "rainy day" as I can borrow a little from family.
I have 15k in savings that I have been eager to use 10k off to pay 10% off the mortgage. So what my question is, the reason I have not paid it off is as I am thinking it could work in my favour to hold onto it - if I wanted to purchase another house/flat for investment purposes.
Am I thinking right? Before ppl start telling me to see an adviser and I have and we did not really get anywhere. In an ideal world in around 6 months time if the house market continues to cool I would like to purchase a run down flat/house for hopefully under 100k to let out, this is obviously hoping I will be able to borrow that amount.
Any suggestions???
I am in a little struggle thinking over what to do. I have 1 property (worth around 100k with no mortgage) which is rented out at £500/month. I live in a house worth around 140k, with a 100k mortgage. In hindsight I should have sold the rented property last year.
Anyway I earn 30k - I have a family and my wife is a housewife. I am not concerned about having money for a "rainy day" as I can borrow a little from family.
I have 15k in savings that I have been eager to use 10k off to pay 10% off the mortgage. So what my question is, the reason I have not paid it off is as I am thinking it could work in my favour to hold onto it - if I wanted to purchase another house/flat for investment purposes.
Am I thinking right? Before ppl start telling me to see an adviser and I have and we did not really get anywhere. In an ideal world in around 6 months time if the house market continues to cool I would like to purchase a run down flat/house for hopefully under 100k to let out, this is obviously hoping I will be able to borrow that amount.
Any suggestions???
0
Comments
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Hi Whiskey you said "I have 1 property (worth around 100k with no mortgage) which is rented out at £500/month. I live in a house worth around 140k, with a 100k mortgage."
My question is why? You should have the mortgage on the rental property to offset the rental income against tax. You should also be spliting the rental income with your housewife (non-tax paying) wife to minimise your tax liability if you are not already doing this.
To answer your question about cash for a future property then you could take it from the fully paid off rental property if need be. Its your choice just be prepared for some barbed replies regarding buying from some of the HPC enthusiasts.Debts as of 01/june/08
[strike]Dad 15,500[/strike] [strike]11,000[/strike] [STRIKE]9000[/STRIKE]
[strike]Friend[/strike] [STRIKE]5000[/STRIKE]
[strike]Other 1000[/strike] 0.0
Egg [strike]7633.14[/strike] [strike]6000@0%[/strike]:T0 -
bobby-boy - yes you are 100% right. That is why I put "in hindsight I should have sold". Basically I had to buy my house in a bit of a hurry therefore did not have time to sell, and when I bought the rented house it was re-possessed. Therefore had to exchange quickly and had to be a cash buy.
There is nothing more I would like to sell the rented house, but not in the current market conditions.0
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