Can I borrow to buy a share in investment property?

onekeano

Age 25 - salary c.30k in HSE and living at home with parents.

When my grandparents passed away the family home was left to my mother and 2 brothers and the have rented it successfully for last 5-6 years.

One sibling now wants out for personal reasons and there is an option to buy that share for around 100k.

I have access to around 35k but would need to borrow 65k to buy that share - any idea where best to look for a mortgage for that?

And last question - what rate of tax would I pay on rental income - my current 20% or 41%?

Roy

Santa Cruz

With that lump sum and a history of saving I would say that you are in a good position to borrow. Really you should ring around as regards getting the best terms.
There are many ways of reducing your taxation on rental income that the best thing is to have a chat with an account tant

onekeano

Santa Cruz wrote: »

With that lump sum and a history of saving I would say that you are in a good position to borrow. Really you should ring around as regards getting the best terms.
There are many ways of reducing your taxation on rental income that the best thing is to have a chat with an account tant

Thanks for that SC - when you say ring around do you mean the various banks or mortgage brokers?

Roy

MouseTail

Be aware that should you purchase a share in this, it will severly restrict your ability to borrow again for your own PPR.

Marcusm

Santa Cruz wrote: »

With that lump sum and a history of saving I would say that you are in a good position to borrow. Really you should ring around as regards getting the best terms.
There are many ways of reducing your taxation on rental income that the best thing is to have a chat with an account tant

That may be true generally but I would doubt that the OP has any prospect of raising finance against a part ownership of an investment property in the current climate. The "secured" nature of property funding is severely compromised where the asset secured is only partly owned - either the other owners will effectively have to become exposed to the borrowing (through agreeing that the bank can take full security) or the bank will have a much less acceptable position.

In the current credit constrained environment, this is not going to be high up any lending officer's target list.

Santa Cruz

Marcusm wrote: »

That may be true generally but I would doubt that the OP has any prospect of raising finance against a part ownership of an investment property in the current climate. The "secured" nature of property funding is severely compromised where the asset secured is only partly owned - either the other owners will effectively have to become exposed to the borrowing (through agreeing that the bank can take full security) or the bank will have a much less acceptable position.

In the current credit constrained environment, this is not going to be high up any lending officer's target list.

That may be the position if he is looking for a mortgage type loan. But he is only looking for 65000. The rental income record, his deposit, saving record and ability to repay will all be considered. When I say ring around I mean ring the various banks.
Despite what the media are pumping out credit is available to the right customers

Marcusm

Santa Cruz wrote: »

That may be the position if he is looking for a mortgage type loan. But he is only looking for 65000. The rental income record, his deposit, saving record and ability to repay will all be considered. When I say ring around I mean ring the various banks.
Despite what the media are pumping out credit is available to the right customers

An unsecured loan to someone of 65k to someone who earns 30k pa? I'd like to have some of what you're smoking.

riclad

http://www.citizensinformation.ie/en/money_and_tax/tax/income_tax/how_your_tax_is_calculated.html
looks like your income over 36k is taxed at 41 percent.
landlords are taxed on profit,
after expenses,eg 75 per cent of interest paid on loan,
plus maintenance, insurance ,prtb fees,etc

just go to a mortgage broker , they,ll give you advice free,
as to whether you can get a loan.

gaius c

Marcusm wrote: »

An unsecured loan to someone of 65k to someone who earns 30k pa? I'd like to have some of what you're smoking.

Yeah. If he stops paying (not saying he will, just seeing it from the bank's point of view), what security do they have that they can repo?
A (minority) share in a house won't be of huge interest to them.

MouseTail

gaius c wrote: »

Yeah. If he stops paying (not saying he will, just seeing it from the bank's point of view), what security do they have that they can repo?
A (minority) share in a house won't be of huge interest to them.

Good point, and because none of the other parties are likely to have a mortgage secured on the property, the bank will in fact have no security at all.

Mrs OBumble

Is there any option of doing a deal within the family, ie borrow the sum needed from a relative and pay them back over time like a mortgage, but they won't have as many concerns over conditions.

onekeano

thanks very much folks - making an appointmnet with a broker over the next couple of days so that will probably throw some more light on what options are available.

Roy

onekeano

Making some progress in terms of getting funds - any idea what a competitive Buy to Let variable rate is? I would have expected around 5%.


Roy