Remortgage to Invest in Another Property

Remortgage is an avenue to investing in a second property. One takes the built up equity out of a remortgage property and uses the funds to purchase and invest in a second property. When a homeowner has considerable equity built up in a property, loan rates are low and the housing market has well priced properties available it is a good time to consider the investment options of purchasing a second home. 

Leasing the property can help defray costs of the new mortgage on the second property. Over time equity builds in the second property just as it did the first one. Also, once prices in homes increase selling the second property can result in a profit, especially if improvements were made to the property.

If you are considering a remortgage and you have a child in college, combine the two for a tax advantage. When children go off to college, purchasing the home they are going to spend the next 3 years in can be very profitable.

Having complete control of expansions, routine maintenance and even landscaping leaves a lot of flexibility in decision making while the home is occupied. Just keep in mind that for those 3 years your child is in college as well as beyond, until the property sells, there is a commitment to take care of it.

If you decide to purchase a home for your child to live in while in college there are a couple of things to also remember: making sure the property is in a favorable location and discovering if the child already has someone they are considering as a roommate. This could mean immediate new tenants.

These new tenants could mean some additional and easy income. Placing the period property in the child’s name, enables them to rent to the tenant for up to 4,250 pounds per year - tax free.

Have a financial advisor take a close look at the financial situation you are currently in to see if it would be a good short term or long term plan for you to remortgage to invest in a second property.