Second Mortgage

9

90210

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Hi all



I have a chance to buy another property a 2 bed apt for €317K; I also have a mortgage on a 1 bed, which is in the same development. I bought the 1 bed for €205 and it is now worth €255K. I now wish to buy the 2 beds and rent the 1 bed (already have tenants for 1 bed). Getting a very good deal on the 2 beds also.



I have a mortgage with F Active on the 1 bed, but thinking of going for an offset with NIB and changing both over to NIB.



I was getting a rate of 3.53 on the family home (2 bed) and a rate of 4.03 on the 1 bed (38 years on the 2 bed, 25 years on the 1 bed).



The problem is that I will need 100% for the two bed as I need to keep funds for furnishings and F Active have told me that since they never give a mortgage for 100% on a second property that rate of 4.03 would be required.

The rates seem a bit high anyone got feedback on this?
 
90210 said:
I bought the 1 bed for €205 and it is now worth €255K. I now wish to buy the 2 beds and rent the 1 bed (already have tenants for 1 bed).
Click to expand...

Did you buy the 1 bed in the last five years? If so have you factored in the cost of the once you rent it out? Why not sell the 1 bed now and take the CGT free gain?

Are you comfortable with concentrating (presumably) so much of your overall wealth in a single asset class and geographic region by buying more property in the same development? Have you crunched the numbers and assessed the viability of the property investment plan? Are you au fait with all the obligations (e.g. tax etc.) implied by renting property?
 
As far as i am aware i will not be liable for Stamp Duty on the new property as it is under 125 Sq Metres and is a new build , i will reside in this property.
The clawback on my first property will be about 6k based on 3% of 205K so that will be covered.
The development is very small and unique and will be the subject of a new train line in the next year or so which will be right outside the development and the current price is extremely attractive.
 
If it is an investment property and not principal place of residence, I think it is liable to stamp duty.
 
I will be residing in the new property and it is brand new, no previous occupiers so it is not liable for stamp duty.
 
Yes, but you will be renting out your other property, so I don't think you qualify.


I stand open to correction.
 
I think that 90210 is correct. The second property is new, under the 125sqm floor area certificate limit and will he 90210's PPR so it is exempt from stamp duty even though 90210 is not a first time buyer and is retaining the first property for rental purposes. If the first property is rented out within 5 years of purchase then 90210 is subject to a clawback of stamp duty on that one as explained above. The fact that the first property is being retained and converted from PPR to rental property has no bearing on the stamp duty treatment of the new property.
 
Thanks Clubman , i double - checked this out on the web as Culchie was giving me heart attacks. Thought it would have been beans on toast for a few months.But it is part of your previous link and no Stamp Duty applies
 
This may seem a silly question to some but Can some one pls explain what Clubman means when he refers to the cost of the stamp duty clawback in the message above.
 
If you buy a house as an owner occupier and subsequently rent it out within five years of purchase (other than under the owner occupier rent a room scheme) then you are liable to pay a stamp duty clawback to the extent that what you originally paid in stamp duty (possibly nothing) differs from what an investor would have paid on the same purchase. Does that clarify things for you?
 
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