Guest rockpool crab

Mortgages in UK and in Oz

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    Guest rockpool crab

    Hi there,

     

    I'm trying to get figures on renting out our house in UK. I've spoken to an IFA and the figures he's quoting are based on a mortgage over 25 years. I'm 43 and can't understand why he's doing this. I was hoping to remortage our property and take the repayment term over 12 years (basically doubling) what we have at the moment. This way I could release some equity to bring with us to Oz and then still have the house, which would be rented out. I've asked him why it's over 25 but he's not got back...he just said.... "

    It does not work the way you suggest of increasing the term to 12 years and borrowing £120k."

     

    Anyways..this has got me thinking...that by the time we come to buy (if we can even afford to) in Oz will I be able to secure a mortgage over say 15 years. Is that feasible?

    Hope you can help.

    Carol Ann

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    Hi Carol Ann, there are different payment options here, you can pay monthly, fortnightly or weekly. If you pay fortnightly as opposed to monthly then the payments come down and same for fortnightly to weekly they come down further.

     

    For a 25 year mortgage paid weekly, you can decrease the term to 18years.

     

    If you go onto the www.realestate.com.au site there is a mortgage calculator at the side, have a mess about with it and see what figures come up for you.

     

    Oh you must be getting excited now.......especially looking at mortgages already !!!!

     

    Good luck x

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    Guest rockpool crab
    Hi Carol Ann, there are different payment options here, you can pay monthly, fortnightly or weekly. If you pay fortnightly as opposed to monthly then the payments come down and same for fortnightly to weekly they come down further.

     

    For a 25 year mortgage paid weekly, you can decrease the term to 18years.

     

    If you go onto the www.realestate.com.au site there is a mortgage calculator at the side, have a mess about with it and see what figures come up for you.

     

    Oh you must be getting excited now.......especially looking at mortgages already !!!!

     

    Good luck x

     

    Ooo..thanks for the link...I'll go check it out. Wow re the 25 year paid weekly is 18 years..that's a brilliant tip. I think we could just about squeak an 18 year mortgage....18 + 45 (assuming it takes us a couple of year to settle in) would be 63..what's the retirement age...65? in oz? Although if I paint till i die..might never retire..lol.

     

    Cheers ..Carol Ann..x

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    Hi there,

     

    I'm trying to get figures on renting out our house in UK. I've spoken to an IFA and the figures he's quoting are based on a mortgage over 25 years. I'm 43 and can't understand why he's doing this. I was hoping to remortage our property and take the repayment term over 12 years (basically doubling) what we have at the moment. This way I could release some equity to bring with us to Oz and then still have the house, which would be rented out. I've asked him why it's over 25 but he's not got back...he just said.... "

    It does not work the way you suggest of increasing the term to 12 years and borrowing £120k."

     

    Anyways..this has got me thinking...that by the time we come to buy (if we can even afford to) in Oz will I be able to secure a mortgage over say 15 years. Is that feasible?

     

    Hope you can help.

     

    Carol Ann

     

    Hi Carol Ann

     

    I'm a mortgage broker and I don't understand why he is quoting for 25 years also!

     

    If you are planning to rent out why don't you go for a flexible mortgage on an interest only basis over 12 years? That way you can make overpayments into the mortgage and so pay it off quicker and at times when you have no tenant, you will only have to pay the minimum amount.

     

    Feel free to PM me if you want any further details.

     

    P.S. I don't charge.

     

    Howard.

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    Guest rockpool crab
    Hi Carol Ann

     

    I have tried to reply to your PM but you have got your settings set to not allow replies.

     

    Thanks

    Howard

     

    Lol..I'm such a newb..I'll go and see if I can take that off..sorry.

     

    Carol Ann

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    Guest the4hopes

    Have you found out about a buy to let mortgage, the amount is based on your rental income. We could have done this and still come out with £30,000 for us.

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    Guest rockpool crab
    Have you found out about a buy to let mortgage, the amount is based on your rental income. We could have done this and still come out with £30,000 for us.

     

    Hi there,

     

    I've been onto "Castle Estates" in Greenock. The guy was really helpful and told me about buy to let, as did "Flynn" in previous note. I think this route is sounding most hopeful to be honest. The guy in Greenock said there were people on his books looking for family rental and at what I'd anticipate we'd be asking I don't think it would put people off...quite the opposite. I'm feeling good about it and think need to discuss it a bit further with OH but it's definitely looking good :-) Although..if it's buy-to-let..what's to say you can't take it over 25 years as you're only paying interest...that way it reduces the payments...say you rented at £650 then took out 25 year buy to let and the payments worked out at £300..that would leave £350 clear as an income...is that right? I'd anticipated 12 years initially..but thinking about it. Then as long as it's accruing equity you can offset against the mortage to hopefully pay it off. But i guess the interest is waaaaaaaaaaaaaaaaaaaay more on a 25 year buy to let than a 12 year eh..just guessing here mind you.

     

    Now I need to find out about the tax implications. Read that somewhere today. Gosh my head is officially bursting today..lol...I'm not much of a number cruncher really.

     

    Thanks for advice ..really appreciate it ..take care for now..carol Ann

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    Guest the4hopes

    Hi Carol Ann,

    You will have to pay tax on any income over the monthly mortgage payment.

    Why not take the mortgage out over less time, on repayment and pay it off quicker.

    Laura x

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    Guest rockpool crab
    Hi Carol Ann,

    You will have to pay tax on any income over the monthly mortgage payment.

    Why not take the mortgage out over less time, on repayment and pay it off quicker.

    Laura x

     

    Hiya, ahaaaaa..so you pay tax on any income..so my £350 a month clear will be taxed...sigh..you just can't win eh..lol.

     

    I thought about repayment but it bumps the rental payments up at least £200 making it not as nice an option. I figure if someone could pay £850 a month rent then they'd be as well buying..but £650 or even less sounds better..otherwise I'd prefer the repayment option too. But guess my house isn't worth that much really :-( I should keep the mortgage term down though.,you're right about that..just got carried away with the thought of the extra dosh coming in. Was thinking by the time 25 years has passed on and your sitting with your 100k interest only mortgage..surely when you sold the house you'd pay back the 100K easy...and the rest is yours..but you still had some earning from the rent in the first place.

     

    I daresay I'm grossly simplyfing all this :0)

     

    Carol Ann

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    Guest the4hopes

    Hi Carol Ann

    Have you had an estate agent (rental) to tell you how much you can rent the house for? We could rent ours for £750, per month. People will pay the rental, if they havent got money for a deposit for a mortgage they will need to rent. So dont give up, find out some more.

    Laura x

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    Guest Jim Scott

    Sorry for posting this comments on another thread as well, but I felt is sufficiently important to make sure it's covered here:

     

    I would like to draw the attention of anyone reading this thread to the following forum/website;

     

    http://www.taxationweb.co.uk/forum/discuss.php?id=1165

     

    It's a bit dated, but does talk about the issue of remortgaging a UK home when it is to be rented out, and using that money to buy another home to live in, as well as some of the tax implications. I doubt that anything has changed tax wise since this debate occurred.

     

    My point is, beware of the risks and tax implications before embarking on this route:-

     

    As I understand it, the rent you receive is fully taxable income. It is only the interest on your mortgage which is deductable. i.e.

    - principal repayments are not deductable

    - interest on an equity release loan designed to raise cash for a deposit on a home either in UK or OZ, may not be deductable.

    - there are of course other tax benefits/deductions for maintenance and other expenses, but:

     

    The UK rules appear to be similar to OZ in relation to this issue.

     

    I recommend you speak to a professional tax adviser if you are in any doubt and be certain of the true "cashflow" implications. I'd hate to hear of anyone getting hit with a massive tax bill they were not expecting.

     

    In particular, do the numbers to check and see if you may be better to sell, and bring your equity tax free (even if less than you might have hoped) to end up with a smaller home loan in OZ as compared to having a small? original loan on your UK property that is tax deductable + an equity release loan that is not + the loan on the new OZ property.

     

    Note: I do not offer UK tax advice (or OZ tax advice for that matter!)

     

    If you do the numbers and you can still afford to keep the UK property - great. Best wishes all.

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    Guest Senior Loan Technician
    Hi there,

     

    I'm trying to get figures on renting out our house in UK. I've spoken to an IFA and the figures he's quoting are based on a mortgage over 25 years. I'm 43 and can't understand why he's doing this. I was hoping to remortage our property and take the repayment term over 12 years (basically doubling) what we have at the moment. This way I could release some equity to bring with us to Oz and then still have the house, which would be rented out. I've asked him why it's over 25 but he's not got back...he just said.... "

    It does not work the way you suggest of increasing the term to 12 years and borrowing £120k."

     

    Anyways..this has got me thinking...that by the time we come to buy (if we can even afford to) in Oz will I be able to secure a mortgage over say 15 years. Is that feasible?

     

    Hope you can help.

     

    Carol Ann

     

    Good Afternoon Carol,

     

    My name is Josh Blyth and I work for a company called Urbantech Finance here in Adelaide. In answer to your question, when you move to Australia you can take out a mortgage over a 15-year period.

     

    It is not the norm to do this as most people can't afford the repayments with a 15-year loan term. What's more common is to take the mortgage over a 25 or 30-year term and be put in a facility where you do get penalised for making extra repayments. If you have any other mortgage related questions, I'm more than happy to answer them for you. My email is josh@urbantechgroup.com.au

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