Buying a house - Not enough money...
Discussion
I will keep this brief.
Our house has been valued circa 200K
Local house has come up at 425K
We have been approved up to 280K (without selling car
)
The local house has a 2 bedroom cottage in the grounds.
Currently renting for 400+ a month
Worth 150k ish.
Is there any way we could get the bank to extend to the full value if we agree to sell the cottage?
Or if we show the rental potential?
Just throwing around figures and can see it working if the bank are erm... helpful!!
Our house has been valued circa 200K
Local house has come up at 425K
We have been approved up to 280K (without selling car
)The local house has a 2 bedroom cottage in the grounds.
Currently renting for 400+ a month
Worth 150k ish.
Is there any way we could get the bank to extend to the full value if we agree to sell the cottage?
Or if we show the rental potential?
Just throwing around figures and can see it working if the bank are erm... helpful!!
Sorry, I didn't make it very clear did I!
We would need to borrow the extra 225K but have only been approved for the extra 80K.
So, selling the cottage would make up the difference easily I would imagine.
Just in the current climate I doubt anyone would take that risk with us.
Pie in the sky dreaming really
We would need to borrow the extra 225K but have only been approved for the extra 80K.
So, selling the cottage would make up the difference easily I would imagine.
Just in the current climate I doubt anyone would take that risk with us.
Pie in the sky dreaming really
clarkmagpie said:
Sorry, I didn't make it very clear did I!
We would need to borrow the extra 225K but have only been approved for the extra 80K.
So, selling the cottage would make up the difference easily I would imagine.
Just in the current climate I doubt anyone would take that risk with us.
Pie in the sky dreaming really
Why not ask the vendor to hive off the cottage from the deeds and let him have the problem of selling it?We would need to borrow the extra 225K but have only been approved for the extra 80K.
So, selling the cottage would make up the difference easily I would imagine.
Just in the current climate I doubt anyone would take that risk with us.
Pie in the sky dreaming really
DonkeyApple said:
Why not ask the vendor to hive off the cottage from the deeds and let him have the problem of selling it?
I'd guess that the value of the cottage may well drop below the required figure becasue you would tehn be buying a house with shared land and no control over anythingWould it work better as a business?
- Sell current place.
- Plough money into a property investment company.
- Get loan through company and buy new place with cottage.
- Rent house to yourself and cottage to tenants.
- Set rents so company never makes a profit, so doesn't incur tax.
What am I missing out?
- Sell current place.
- Plough money into a property investment company.
- Get loan through company and buy new place with cottage.
- Rent house to yourself and cottage to tenants.
- Set rents so company never makes a profit, so doesn't incur tax.
What am I missing out?
louiebaby said:
Would it work better as a business?
- Sell current place.
- Plough money into a property investment company.
- Get loan through company and buy new place with cottage.
- Rent house to yourself and cottage to tenants.
- Set rents so company never makes a profit, so doesn't incur tax.
What am I missing out?
Some economic basics - Sell current place.
- Plough money into a property investment company.
- Get loan through company and buy new place with cottage.
- Rent house to yourself and cottage to tenants.
- Set rents so company never makes a profit, so doesn't incur tax.
What am I missing out?
Cottage costs 150k. Rents for 400/month. 3% gross yield before any costs etc = Extremely bad business plan.
Yield needs to be substantially higher.
In fact, the numbers allude to the cottage being massively over valued in the first instance.
Best to look at living in the cottage and renting the main house, but again, this would depend on the yield and whether there is any kind of safety cushion against rental default etc.
DonkeyApple said:
Cottage costs 150k. Rents for 400/month. 3% gross yield before any costs etc = Extremely bad business plan.
Yield needs to be substantially higher.
In fact, the numbers allude to the cottage being massively over valued in the first instance.
Something doesn't sound right in that.Yield needs to be substantially higher.
In fact, the numbers allude to the cottage being massively over valued in the first instance.
Either the cottage isn't worth £150k or the current monthly rental of £400 is way too low.
I currently get £550+ a month for houses only worth £70-80k in not very good areas.
Reading between the lines the cottage should be fetching at least £7-800 a month if the grounds and value are correct.
14-7 said:
DonkeyApple said:
Cottage costs 150k. Rents for 400/month. 3% gross yield before any costs etc = Extremely bad business plan.
Yield needs to be substantially higher.
In fact, the numbers allude to the cottage being massively over valued in the first instance.
Something doesn't sound right in that.Yield needs to be substantially higher.
In fact, the numbers allude to the cottage being massively over valued in the first instance.
Either the cottage isn't worth £150k or the current monthly rental of £400 is way too low.
I currently get £550+ a month for houses only worth £70-80k in not very good areas.
Reading between the lines the cottage should be fetching at least £7-800 a month if the grounds and value are correct.
So what you want is for the bank to give you £80,000 extra based on the fact the cottage will provide you with £400 income which will cover the extra £80,000 mortgage.
In theory it works if the bank buys that im not so sure. Does the cottage have a sitting tennant? or do you have to try and rent it?
Would it work on two separate mortgages? BTL on the cottage with 30% deposit and the £400 pm rent what does that leave you with as a deposit on the main house?
In theory it works if the bank buys that im not so sure. Does the cottage have a sitting tennant? or do you have to try and rent it?
Would it work on two separate mortgages? BTL on the cottage with 30% deposit and the £400 pm rent what does that leave you with as a deposit on the main house?
scotal said:
That will only work if the cottage is on a separate title.
Which im sure the OPers solicitors could sort out when hes buying the two? people must do this all the time with property and land etc... It would be similar to buying a house plus a paddock from the farmer next door changing the deeds on the house to show a new paddock.
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