What to do next on the way to my first intentional property investment

Haha! I made a couple of grand on a van earlier this year

I would release the equity in the UK if you can. That will bump up your deposit and give you many more lending options. I would also sit down and look at your timeline over the next couple of years. If your pay is going to dramatically decrease, you need to plan ahead for that in terms of purchases but also in regard to holding them once they're bought.

 

Haha... what was your ROI on the van, Jess?

Good input too. If you can release the UK equity, it would make sense.

 

We paid $27k, took it around Australia, gave it a clean and sold it for $30k.

 

Did you pay CGT or was it CGT free as you lived in it?

 

I think you will struggle to get your current lender in the UK to agree to allow you to access equity in the property being a non resident so not sure that is going to be an option.

As has been said a 95% lvr on an IP in the current climate is certainly not as easy to arrange as it was but there maybe a couple of things you can do to make life easier going forward and improve your chances.

Cheers



Richard

 

Definitely CGT free That said, it took us 2 days to get all the red dirt out, so if I billed for the work it would be break even

 

Thanks all for your input and advice, it's definitely appreciated.

So I have got in touch with a couple of UK expat brokers. One has said that with the rent I have coming in on the property vs the monthly payment of the loan, I will not be able to get lending. I am about $400 per month under what I could achieve at the top end of the market rents locally so should easily be able to raise that by $300 although, as my brother is my tenant ( I am aware of the can of worms this could lead to and issues it could be causing me in lost revenue etc ) I will not be raising the rent just yet.

The second broker said that the capital raising through equity release will not be an issue at all so I will explain what was offered to me vs my current deal and you can tell me if it is as good as it sounds or if I am missing a trick.

My current mortgage is an interest only on 120,000 pounds at 4.78% APR giving me a monthly payment of 478.16 pounds
The mortgage options I have been offered are all repayment on 127500 taking me to 75% LTV and all over 32 years.

1.79% fixed to 30/09/2017, lenders fee £1,025 that is added to the mortgage, free valuation & legal’s. Monthly repayment £440

2.3% fixed to 30/09/2018, lenders fee £1,025 that is added to the mortgage, free valuation & legal’s. Monthly repayment £474

2.78% fixed to 30/09/2020, lenders fee £1,025 that is added to the mortgage, free valuation & legal’s. Monthly repayment £506

Broker fee is 1% of the loan amount (minimum £750) payable £250 on application, only once we have a positive decision in principle, & the balance on offer.

I would most likely to take option number two. My calculations say that the initial extra borrowing of 7500 pounds will have the been repayed in 32 payments and by the end of the of the 3 year fixed term I will owe less than I currently owe and the monthly payment will be less per month. I know that I will be liable for more tax as the interest on the mortgage payments will be less but this still seems like a good move.

Is there anything glaringly obvious that this amateur is missing or is this as good as it seems?

One question I have not looked at yet is what the rate reverts to after the end of the fixed term as I assume that I will re mortgage at that time onto another good deal. I have also not yet confirmed if there is a charge to release me from my current mortgage but from memory there is not.

Keen to hear your thoughts and I am going to post the same question as a new post to increase the exposure. Hope i am not breaking any rules by doing so.

 

Hi 5 on that profit by the way Jess, did you just pick up all the country appreciation as you went around? What a result and what an experience.

 

When you say the uk do you mean in England ?
I'm looking to release equity from Scotland but it's proving very hard . I'm told if my house was in England it would be very easy.
I tried loads of expat mortgage places. Liquid expat was the only one that said mayb but now won't reply to my emails. Very frustrating .
Anyway who did you go threw for the expat mortgage?

 

It was amazing - only 4 months but the best memories from it. FNQ was the highlight - I've never been anywhere more beautiful.

 

Have you tried calling them? I am tenacious when I want a result. I would call them directly and pin them down for an answer so you can make a decision either way and move forward somehow. Anyway, I have been speaking to these guys and I have not researched them to see how they stack up and the last guy I used in the UK to re-mortgage was beyond useless once I had reached the point of committing to using him so altough I got the result in the end, it was not without a lot of hard work on my part. I ended up cutting him out completely and dealing with the lender myself directly as to get an answer from the broker was like pulling teeth. Lets hope these are better.

http://www.meridian-mortgages.co.uk/

 

Sorry I should have also said that the house I own there is in Kent.

I would love to go and see it all Jess, one of the reasons I am determined to make a success of all this. A friend of mine is just wrapping up 9 months on tour around Oz and it looks so much fun. I would really like to tour Canada, America and Europe extensively too.

 

Yes I've tryd calling them and it never gets picked up when I call the guy direct and when I get the front desk they are useless.
I'll try meridian and see how I get on.
Thanks