Buy for cash or take out a mortgage?

Brendan Burgess said:
I presume that if someone is trading up and buys the new house before they sell their own, it's not a buy to let?

Which is what I presume that the OP is doing.

The banks sometimes suggest BTL to get around the Loan to Income limits.

Brendan
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I was in similar situation re: purchasing property requiring renovation.

EBS didn't treat it as a buy to let for me as I said I would be selling the other property within 12 months.
The original mortgage was with EBS as was the mortgage for the new property.

If I had said I was going to keep the original property, I presume then I would have had to put that mortgage onto BTL, but then I could treat expected rent on it as part of income.
 
Brendan Burgess said:
So you are suggesting that he borrows at 4% with no tax relief to invest in the stock market?

This really makes no sense at all. He would want a risk-free return of about 7% a year to break even.

Brendan
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Yes, that's exactly what I would do.
 
Buy with cash, Try an negotiate a decent price as there would be no delay and no worry of banks changing the parameters.

For the renovation get a home improvement loan (An Post 10 year 4.9%)
 
odyssey06 said:
EBS didn't treat it as a buy to let for me as I said I would be selling the other property within 12 months.
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What though, 3 months later, after a change of heart/circumstances, you decided not to sell your other property?

Was there a time stipulation on the sale?, like as in, how would they have known?
 
LS400 said:
What though, 3 months later, after a change of heart/circumstances, you decided not to sell your other property?

Was there a time stipulation on the sale?, like as in, how would they have known?
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In theory yes. They would know of I was still paying mortgage on first property... if they kept paying attention.
 
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