How to secure home against investment property risk

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laila

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I notice in FAQ's that an investment property can put principal home at risk. Would this still be the case in the following scenario:

I currently have one investment property and my home with same mortgage provider. I am looking at a second imvestment property using only the equity in the first investment property as security. I would get loan approval for this. Would I protect my principal private residence if I moved both investment mortgages to a different mortgage provider?

Any advice appreciated. Thanks.
 
Your investment mortgage should have no bearing on your principle residence. The loan is secured on the investment property not your principle residence.
 
Yeah - but according to Brendan in the FAQ (which surprised me too when I read it just now...)
BUT AM I NOT PUTTING MY HOME AT RISK?

If you borrow to invest in property, you are putting your home at risk, whether you secure it against your home or not. If property values fall and your investment mortgage is higher than the property value, you can't just hand back the keys to the lender and walk away. You personally owe the money and the bank will get a judgement against you for the amount due.

Having a separate mortgage for the investment property provides no extra security.
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Hi, i think most mortgages are for all sums due. so i would expect that any shortfall due on another property's mortgage would be secured on your home mortgage also.
 
Maybe you should consider taking out a policy out with these. www.rentassured.ie it might ease your worries . I haven't used them myself .No affiliation . and i think theres some conditions to be met by your Tennant's to qualify . Not sure if the premium is a deductible either ? maybe someone here might know more about this kind of policy re: being worth it or not.
 
Niallers said:
Your investment mortgage should have no bearing on your principle residence. The loan is secured on the investment property not your principle residence.
Click to expand...

Say you default on your investment property and when the Bank sells it they don't recover the full amount due to them, in negative equity circumstances, you will still be responsible for the shortfall and the bank can take you to court to recover it, which might ultimately lead to a judgement being registered against your PPR.

It doesn't have to be specifically secured against the PPR, it is just that the PPR is an asset that you have that the judgment can be registered against.
 
Thanks everyone for the excellent clarifications. Rentassured seems like a very good idea. Thanks again.
 
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