Hello,
I am playing with the idea of buying a rental property, which I would like to be able to hand over to my daughter in 12-14 years (she's four). The property is in the city where she lives. In the meantime, I plan to rent the property out.
I am wondering the best way to approach the mortgage so that it doesn't impact my CMS payments too much.
I have a friend who has many rentals and uses interest only. My concern is that this would generate more monthly income for me, inevitably increasing my CMS.
My question is, does capital repayment eliminate the profit in the eyes of the CMS?
For example: The rent is £750 and I pay £750 capital mortgage, which would allow me to pay off the mortgage in 12 years (ideal!). If the CMS will increase my monthly payments even though I am not profiting monthly, I will either need to increase the mortgage term or go down the interest-only route and overpay using the profits.
Many thanks
hi,
generally you are expected to pay additional CM from your rental income. I recommend you join this support group for paying parents:.
https://www.facebook.com/groups/239699060076601/?ref=share