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Needing a bigger house since BabyGixer arrived, so am considering equity release on our house and using that as a deposit on somewhere with another bedroom. Then renting out the house we have released the equity from.
Can anyone give me some advice on the benefits of this, don't wan't to sell the house we are in at the moment as we might want to downsize and move back in the future.
Not trying to build up a property portfolio - so don't need lectures on capitilism, feed the poor starving children,what about us with no house etc 😉
Sounds like you need proper advice - whereabouts are you?
Just bits and pieces really:
You'll pay tax on the rental income above the cost of the interest part of the mortgage.
You'll be at a high LTV on the existing property if you release equity which will increase the cost of borrowing. That is a big problem in today's market where it is increasingly harder to secure an affordable mortgage with high LTVs
You released equity will then be in another new property, which is more risk.
If you can get a mortgage on the existing property with a high LTV, why not leave the equity where it is and get a new mortgage with a high LTV on the new property?
Why not just rent? Less risky and less costly in todays market.
The days of owning two properties because you want to speculate on the market rising are long gone. You'd be taking an incredible risk to meet a goal that can more easily and readily be met by renting.
Live just outside of Cannock
Sorry, know a few mortgage specialists in the S.E. but nobody up there.
I can help you out with this if you'd like to send me a PM.
I'm selling a house in Etchinghill, Rugeley... I'll even throw in the bike mounts on the garage wall!
mda - YGM