Using 1st property to buy 2nd

Discussion in 'Mortgages and buying and selling homes' started by Mrssor, Jan 4, 2017.

  1. Mrssor

    Mrssor New Member

    Posts:
    1
    Hi All,

    First time posting so apologies if this had been asked before or is a silly question!
    Husband and I bought house 4 years ago(25 year mortgage of €75k). House is now worth about €150/160. We want to buy bigger house but don't want to sell current house. Would prefer to Keep as investment and rent it out.
    Is there some way of using first house as equity/collateral to get 2nd mortgage or do we need to save to 20% and start from scratch separately for second property?
     
  2. trasneoir

    trasneoir Frequent Poster

    Posts:
    313
    No, you need 20% non-borrowed cash money (there's some wiggle room for property chains). I'm not sure whether or not the (hypothetical) rental profit from property 1 would be allowed to count toward your Loan-to-income ratio on property 2.

    In general terms, this sort of question makes me itchy. Part-time amateurs investing borrowed money seems dicey at the best of times. On top of that, rental properties are subject to lots of risks, and regular investors don't have the capital or time to spread the risk across dozens of properties.
    An awful lot of people came to grief on these rocks 8-10 years ago, and history suggests that it's a cyclical phenomenon.