Saturday, Sep 04, 2010
What could possibly go wrong?
Scotsman: Cash Clinic: Can I count on my rented properties to pay off my mortgage?
Q: I bought my residential house with an interest-only mortgage with the intention that when I sell my buy-to-let (BTL) properties the gains would be used to pay the capital for my residential property. Thus I have been borrowing from the equity in my residential property to maintain my BTL portfolio.
A: Your plan for the future is that the capital appreciation that has arisen on your BTL properties will be sufficient to pay the balance on the interest-only mortgage secured on your home. [There follows some waffle about CGT and tax deductibility of mortgage interest vs rental income. Not a word is written about the risk of having all your eggs in one property basket if the market were to fall.]
Posted by drewster @ 01:06 AM (347 views) Add Comment
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