random2011
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So I will try my best to summarize:
Current Mortgage: 25 yrs left @ 270K on 4.3% SVR
Have offer of 185K therefore 85K NE. We are Sale Agreed.
New Home I plan to purchase is 230K and the bank have approved a NE trade up mortgage which requires a deposit of 25K (exempt of new CB rules due to NE so only 10% deposit required) Also Sale Agreed on this house.
New mortgage is at 4.3% for a value of 285K (230-25k=205k + 80k NE) so LTV is about 125% ..the max for NE trade ups.
New monthly payments on new home are 1450
Now I started to think if I rented out the home I currently live in. That would mean
New Second Mortgage for new home of 230K - deposit. APPROX 190k
So I would end up with 2 mortgages for estimated 260K (existing mortgage on house rented out) + 190k (new mortgage for home I would live in)=450K
Renting out existing home would not completely cover the monthly mortgage. I estimate I would need to pay in about 250 EUROS every month which seems mad but without having done the maths I am wondering if this 250 would be offset against the new mortgage payments estimated at 950 per month. So outgoings would be 1200 (950 MORTAGE PAYMENT FOR NEW HOME +250 SHORTFALL FOR EXISTING HOME MORTGAGE PAYMENT) per month providing house is rented out versus 1450 (new mortgage which includes NE) where I simply have just 1 house.
Hope I explained it well enough and I understand the con's of having to maintain and pay for a rental. Out of interest would you still pay rental income even if the rent does not cover the mortgage?
Appreciate any input. I'm thinking about this as property rises I could reduce the NE and sell the house in a few years. If I sell it now I have a loss of 80K but in 5-10 years I could be clear of the NE or alternatively I could keep it long term and sell it when's it's profitable.
Current Mortgage: 25 yrs left @ 270K on 4.3% SVR
Have offer of 185K therefore 85K NE. We are Sale Agreed.
New Home I plan to purchase is 230K and the bank have approved a NE trade up mortgage which requires a deposit of 25K (exempt of new CB rules due to NE so only 10% deposit required) Also Sale Agreed on this house.
New mortgage is at 4.3% for a value of 285K (230-25k=205k + 80k NE) so LTV is about 125% ..the max for NE trade ups.
New monthly payments on new home are 1450
Now I started to think if I rented out the home I currently live in. That would mean
New Second Mortgage for new home of 230K - deposit. APPROX 190k
So I would end up with 2 mortgages for estimated 260K (existing mortgage on house rented out) + 190k (new mortgage for home I would live in)=450K
Renting out existing home would not completely cover the monthly mortgage. I estimate I would need to pay in about 250 EUROS every month which seems mad but without having done the maths I am wondering if this 250 would be offset against the new mortgage payments estimated at 950 per month. So outgoings would be 1200 (950 MORTAGE PAYMENT FOR NEW HOME +250 SHORTFALL FOR EXISTING HOME MORTGAGE PAYMENT) per month providing house is rented out versus 1450 (new mortgage which includes NE) where I simply have just 1 house.
Hope I explained it well enough and I understand the con's of having to maintain and pay for a rental. Out of interest would you still pay rental income even if the rent does not cover the mortgage?
Appreciate any input. I'm thinking about this as property rises I could reduce the NE and sell the house in a few years. If I sell it now I have a loss of 80K but in 5-10 years I could be clear of the NE or alternatively I could keep it long term and sell it when's it's profitable.