US vs UK finance

[debchard]

We are considering buying a rental home in Florida. Have read lots of information so far - both good and bad Can anyone tell me whether it would be best to finance this using a US mortgage or UK. Can anyone also recommend a good, trustworthy, reliable realtor we can contact for further help?

Many thanks.

Debbie

 

[Hilary]

Sorry, Debbie, I don't know.

Bumping this up for you

 

[scousemouse36]

Hi Deb

At this moment in time a sterling mortgage would be better, because of the strong pound.

Though you have to bear in mind that interest payments are not tax deductable in the US if the loan is in sterling. The loan would have to be in dollars for you to claim the interest payments as an expense.

There is a lot to take into account, depending on how much you will rent it out and to who.

I can also recommend a realtor to you who is great and its good to know their services cost you nothing!

We are buying in florida very soon, in fact in a matter of weeks, as we are there soon and will hopefully be finding the right property.

You should also consider DVC.

It does depend on your circumstances, family size, capital available and how often you will visit,

For us buying a villa provides more flexibilty, access to all of florida, an appreciating asset that will always be yours and the space for 3 little girls to play & fight lol

If you have any questions I would be happy to pass on what I have learnt,

cheers

 

[SidB]

I'm going to be a little contravertial here.

Why buy somewhere in Florida, indeed almost anywhere. If you have the money, or can afford to pay, what £800 a month in mortgage, why not stay flexible and save that £10,000 to spend whenever and wherever you like. If you have a need for that money, say for college fees, or a medical problem, it's already tied up. If it's a rental property you can't simply sell it and walk away in a few days.

I know you end up with an asset, but your kids will probably loose 40% of it's value in Inheritance Tax. Do they need the burden of ensuring it's rented out and maintained properly, indeed do you ?

There are dozens of countries I want to visit before it's too late. Get out and experience more of the world, and I don't mean Disneyworld !

 

[debchard]

I have emailed you privately scousemouse. SidB - you make a very good point there! We are really looking at this as an investment for the future and our retirement, but as I say, just looking into all the pros and cons for now.

Debbie

 

[scousemouse36]

SIDB

The only thing controversial about what you said, was your spelling and lack of knowledge about the subject you spoke about, apart form that you made some interesting points!

£800pm mortgage,mmmmmmmmmmm now that would be a big property, check your figures.

IHT, you may find that there are various ways to negate this tax and having a mortgage liability does reduce the estate value and also depending on how you own the property could also greatly reduce any IHT liability.

Most intelligent people leave sufficient money on deposit to deal with emergency issues and also prioritise thier spending.

I dont believe being a landlord is a 'burden' and I am sure when I am dead and buried my loved ones will have the choice of owning renting or selling, though that is what leaving an inheritance is all about. CHOICE

As for seeing other parts of the world, well, when you have finished eating your ice cream in bognor regis, you may find you wish to visit a favourite place more than once! or even buy a little something from where you can explore.

I do hope you enjoy youre travelling and look forward to chatting with you soon.

 

[SidB]

Originally posted by scousemouse36
As for seeing other parts of the world, well, when you have finished eating your ice cream in Bognor Regis, you may find you wish to visit a favourite place more than once! or even buy a little something from where you can explore.

Never been to Bognor and never expect to. I'm sure some people find it a lovely place to visit and doesn't deserve that type of comment.

I have been to other places more than once but I won't do it again. If I go to Florida again I'll pick somewhere like Miami or the Keys. I won't choose to stay in Orlando. There are so many places I'd like to visit including Costa Rica, Belize, Peru, Sri Lanka, Malaysia, Northern Thailand, Cambodia, Vietnam, Laos, Australia etc, as well as many places in the UK.

As to my spelling, please, not so rude. People in glass houses and all that. Capitals in Bognor Regis, form instead of from etc.

£800 per month, yes I stand by that, especially with interest rates on the way up. My mortgage repayments are in that region. so I do have a little understanding.

About IHT, the average person doesn't even have a will, and I'm sure even fewer make serious plans to reduce their liability.

I have a couple of friends who've owned properties abroad and both have said "never again." As you mention CHOICE, my choice is not to leave money to my kids after I'm dead and buried, and I've told them this. I'll be investing in their futures when they most need it, ie when they're still young. I've also told my mother that I don't want or need her money. She should spend it on herself.

And as for the comment about "Most intelligent people leave sufficient money on deposit to deal with emergency issues and also prioritise thier spending." Do you have enough savings to deal with a really serious emergency ? I'm not talking about flood damage here. I think that the "intelligent people" comment makes it sound that you feel "more intelligent" than some others who post here.

The tone of your post is uncalled for and perhaps more suitable for one of the debate boards.

 

[vernon]

I decided to have a US mortgage for a US property for a couple of reasons.
1) IMHO it makes sense to have your assets and liabilities in the same currency. If not it increases your exposure to foreign exchange movements and an move the wrong way could mean that if you had to sell your house in the US the resultant monies released may not cover your £ based mortgage. I can understand the arguments for taking a gamble on the $£ rate going back down, I do think that is the most likely, BUT, for most people, it is a very large gamble to be making. I doubt many people would feel comfortable taking a £100,000 punt on the rate of $£ over the next 20 years, accurate forcasts on the next 2 months seems to be beyond most of the "professionals".

2) Tax reasons, you can offset a lot of your earnings from rentals against your mortgage, if you ave a UK based mortgage this is not, I believe, possible.

 

[scousemouse36]

Hey SIDB

Dont be so uptight and pompus

You did say your message would be 'contraversial'

Take a chill pill and enjoy your travels