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  • FIRST POST
    • Matthewlw1
    • By Matthewlw1 8th Aug 18, 1:10 PM
    • 1Posts
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    Matthewlw1
    Buying my second property with a mortgage
    • #1
    • 8th Aug 18, 1:10 PM
    Buying my second property with a mortgage 8th Aug 18 at 1:10 PM
    Hi everyone,


    In need of some advice please!


    I currently live at home with my parents but own a property purchased with cash (no mortgage) and is rented out with a 8-9% return.


    In the next couple of years I am planning on purchasing my own property for me to live in, which will require a mortgage and a decent deposit.

    After looking at mortgage calculator sites, some allow me to use the allowance of the mortgage. Because I'll be applying for this mortgage on my own, it'll go off my salary and rent (rent giving me a larger borrowing allowance).


    Now, is it good practice to first of all try and borrow more with using the income from the rental property?


    My second question is, should am family member decide to purchase the property off me or transfer the property after I purchase my own house would I be entitled to a refund for the extra 3% stamp duty paid?


    Just trying to get my head around what my options are, financially and also legally.


    Thanks


    Matt
Page 1
    • foxy-stoat
    • By foxy-stoat 8th Aug 18, 2:22 PM
    • 3,221 Posts
    • 1,822 Thanks
    foxy-stoat
    • #2
    • 8th Aug 18, 2:22 PM
    • #2
    • 8th Aug 18, 2:22 PM
    Speak to your broker about how much you can borrow on your total income and how much you need to borrow. Borrow what is affordably for you.

    You have 3 years to sell the first property to claim a refund - assuming your spouse isnt the one buying it.
    • davidwood681
    • By davidwood681 8th Aug 18, 2:40 PM
    • 686 Posts
    • 2,061 Thanks
    davidwood681
    • #3
    • 8th Aug 18, 2:40 PM
    • #3
    • 8th Aug 18, 2:40 PM
    Every time I buy a new property my mortgage broker takes my rental incomes into account and along with a current tenancy agreement it's always been seen as a positive
    • Pixie5740
    • By Pixie5740 8th Aug 18, 2:48 PM
    • 13,371 Posts
    • 19,261 Thanks
    Pixie5740
    • #4
    • 8th Aug 18, 2:48 PM
    • #4
    • 8th Aug 18, 2:48 PM

    Now, is it good practice to first of all try and borrow more with using the income from the rental property?
    Originally posted by Matthewlw1
    Depends on your appetite for risk and whether you need to stretch yourself to buy something half decent in a half decent area.


    My second question is, should am family member decide to purchase the property off me or transfer the property after I purchase my own house would I be entitled to a refund for the extra 3% stamp duty paid?
    Originally posted by Matthewlw1
    Purchase which property? The rental property or your new home?

    Have you ever lived in the rental property as your only or main home? For simplicity I'm going to assume you haven't which means that if you still own the property when you buy the new home you will pay the higher rate of SDLT and won't be eligible for a refund if/when you dispose of the rental property. Nor will you be eligible for a refund of SDLT if you dispose of the new home at a later date.
    • AnotherJoe
    • By AnotherJoe 8th Aug 18, 3:43 PM
    • 11,864 Posts
    • 13,842 Thanks
    AnotherJoe
    • #5
    • 8th Aug 18, 3:43 PM
    • #5
    • 8th Aug 18, 3:43 PM

    You have 3 years to sell the first property to claim a refund - assuming your spouse isnt the one buying it.
    Originally posted by foxy-stoat
    AIUI thats incorrect. The refund is only due if you were selling a previous residence
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