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Would you remorgage a house to buy another one?

(8 Posts)
LaCerbiatta Fri 24-Jul-09 11:09:39

We are from Portugal but live here in the UK. We want to eventually move back and so decided to buy a house there. It's worth around £250K and with a lot of help we have paid most of it - we have around £80K left to pay.

We're currently living in a rented flat, with very cheap rent, but unfortunately have to move because of space and school catchment area. We've been looking for a house to rent, but they're so expensive.... (we live in Cambridge). The thought of throwing away £1000 per month is not very apealing. Obviously all our savings went to our house in Portugal so there's no way we can find money for a deposit... unless..... we remorgage our house.

Would you do it? Is it a sensible idea? Once we left the country we would keep the house and rent it out, which would hopefully cover the morgage.

Thanks!

AddictedtoCrunchies Fri 24-Jul-09 11:14:36

I wouldn't do anything like that until the economy has settled down a bit. But that's just me.

Sorry no advice to give but didn't want to leave without saying something.

claricebeansmum Fri 24-Jul-09 11:15:41

I think that there are several things to consider here:

firstly, security of employment for you and DH

secondly, how much repayments for both houses would be and would they be manageable? If you are letting the property in Spain then you need to allow for maintenance, periods with no tenants etc

LIZS Fri 24-Jul-09 11:20:24

Also you you would need to factor in fluctuating exchange rates, what seems like a good euro income now, may not be in the future especially if you rely on it to fund a uk lifestyle. Would you still have other income there to pay your mortgage or are you transferring funds back to do so ?

OrangeFish Fri 24-Jul-09 11:20:57

I have some friend who did it and they seem to be coping fine.

They re mortgaged their flat and with that money they bought a house here in England. I think they didn't take a second mortgage, though. Just paid it in full.

They did this because they realised that even increasing the mortgage of their other house, the payment on that mortgage could be easily covered by renting that property. Mind you, they had no doubt whatsoever of the strong renting demand in the Spanish area they are from and the amount of money they will get each month, that's why they decided to take the risk.

LaCerbiatta Fri 24-Jul-09 11:52:07

We are not renting our house in Portugal. We never have and don't plan to do it. (Stupid I know, but we have our reasons and I suppose that's another discussion!).

I think we would cope fine with the repayments. We need to check houw much they would go up in Portugal, but I don't think it would be a problem. I just think that it would make sense do give money every month toward a house we own than to a landlord...

We have only just thought about this and haven't really done the maths yet.

LIZS Fri 24-Jul-09 12:40:41

If you have no local income you'd need to see if your Portuguese lender would even consider advancing further money to you first. Would you still require a uk mortgage to purchase here as 170k probably won't buy you much outright.

LaCerbiatta Fri 24-Jul-09 15:33:21

Thank you everyone,
Lizs: We wouldn't take a lot of money out of our portuguese property, just the minimum for a deposit here. I suppose our bank wouldn't have any problems with that....
We would definitely need a mortgage here.

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