Remortgaging my home to release capital for second property
I've had a hard time finding out details on remortgaging Help to Buy loans myself, but found one article (http://www.thisismoney.co.uk/money/mortgageshome/article-3038831/Help-Buy-borrowers-risk-missing-best-remortgage-deals.html) which points out it IS possible.  But also that there aren't many lenders offering such deals out there.  The article lists a number of lenders that do offer these programs, and the extra requirements on equity you might have to have. It sounds like it's going to be critical to know how much equity you've built up.   Since part of the valuation increase will be credited to Help to Buy, you won't get all the £30k increase you've mentioned.  Instead, I believe you'll only get 80%, so £24k.   Which would mean your total equity is £24k + £7k = £31k, plus whatever you might have already paid off.  I'm going to assume there isn't much you've paid off, so will assume just over 18%. (31/170) While this is higher than most of the equity limits mentioned in the above article, keep in mind you'd only get cash out corresponding to the difference between your current equity amount and the equity required for the loan.  For example, if you went with a loan requiring 15% equity to qualify, you'd only have 3% over that, and thus get £5.1k out.   And that's before any fees you might have to pay!  (You might have new origination fees, but you also might have early repayment fees.) Maybe you could pursue a lower money down refi and get to keep more, but the same article points out that Help to Buy might consider that too risky for you, and refuse to allow the refi. I think it's worth shopping around to get actual numbers for your exact situation, but personally it doesn't sound like you have enough equity yet to get much cash out of a refi.  Perhaps you'll get lucky though.  Best of luck!
"About deducting mortgage interest: No, you can not deduct it unless it is qualified mortgage interest. ""Qualified mortgage interest is interest and points you pay on a loan secured by your main home or a second home."" (Tax Topic 505).  According to the IRS, ""if you rent out the residence, you must use it for more than 14 days or more than 10% of the number of days you rent it out, whichever is longer.""  Regarding being taxed on income received from the property, if you claim the foreign tax credit you will not be double taxed. According to the IRS, ""The foreign tax credit intends to reduce the double tax burden that would otherwise arise when foreign source income is taxed by both the United States and the foreign country from which the income is derived.""  (from IRS Topic 856 - Foreign Tax Credit)   About property taxes: From my understanding, these cannot be claimed for the foreign tax credit but can be deducted as business expenses. There are various exceptions and stipulations based on your circumstance, so you need to read the official publications and get professional tax advice. Here's an excerpt from Publication 856 - Foreign Tax Credit for Individuals: ""In most  cases,  only  foreign  income  taxes  qualify for the foreign tax credit. Other taxes, such as foreign real and personal property taxes, do not qualify.  But  you  may  be  able  to  deduct  these other  taxes  even  if  you  claim  the  foreign  tax credit for foreign income taxes. In most cases, you can deduct these other taxes  only  if  they  are  expenses incurred  in  a trade  or  business  or  in  the  production  of  in­come.  However,  you  can  deduct  foreign  real property taxes that are not trade or business ex­penses  as  an  itemized  deduction  on  Sched­ule A (Form 1040)."" Note and disclaimer:  Sources: IRS Tax Topic 505 Interest Expense, IRS Real Estate (Taxes, Mortgage Interest, Points, Other Property Expenses) , IRS Topic 514 Foreign Tax Credit , and Publication 856 Foreign Tax Credit for Individuals" "You most definitely can appeal the county's appraisal of your property.  How to do so, and your odds of success will vary widely by your location, but I have successfully appealed the valuation on one of my rental properties. I asked my realtor to provide me with recent sales of comparable homes in the neighborhood & provided them along with my appeal as evidence of what I felt a reasonable valuation should be.  One of three things will happen: 1) Your appeal will be accepted, 2) It will be denied, or 3) you will be asked to come in & plea your case in front of the county assessor. In my case, the county accepted my appeal without needing to testify. Look around your county assessor's website ... you will probably be able to find the form necessary for filing an appeal.  If not, give them a call & they'll tell you the procedure. The county generally uses a simplistic statistical model to do their valuations. Little to no human time is spent reviewing your home's value, so it's quite possible for their valuation to be unreasonable.   An appeal can take a bit of time & paperwork, but can definitely be worth the effort if the county's valuation is way off. Hope this helps! @mhoran_psprep Your point is well taken that in practice the relationship between sales prices & tax assessments is a bit more tenuous. The waters get muddy when property values have a large swing (like the past 5 years). When tax assessor's started seeing large drops in property values during the recession (and consequent drops in their budgets), I'm sure there was considerable pressure to prevent wholesale decreases in tax valuations. It's politically easier to ""prop-up"" falling valuations than to raise tax rates.  However, the fact remains that the models that assessors use in determining property values are based on sales history - thus, I believe (and have found) that recent sales can be a persuasive piece of evidence in a property tax assessment appeal." Disclaimer: I’m not an expert.  This is my basic understanding, which I’m sure someone will be glad to tell is horribly wrong...  You need an LLC.  Many people in my area create an LLC management company, then create individual LLCs for each investment property.  Laws vary by state.  YMMV  Then you start researching properties.  Commercial loans typically require a higher equity position than home ownership.   Assume minimum 30%.  For ease of this conversation let’s say you’re making the horribly poor decision to put that towards a single property.   You’d be looking for a property in the 175-200k value range, because you’ll need to account for settlement expenses (attorney, broker, consultants) and a cash reserve.  You’d be also be looking for what the average cap rate is for your market.  In simplistic terms cap rate is the expected rate of return after expenses.  So if the average market cap rate in that region for comparable properties is 5%, you can expect around 5% return on your investment, after you pay fees, maintenance, taxes, insurance, interest, etc.  Buy a property and hold that property for a few years, making money every year, and claiming deductions on your earnings for something called depreciation.  Fast forward 5 years and you’re ready to sell, the value of your property went up because you made improvements along the way, brought in some better tenants who are paying higher rents, and now you can offer a better cap rate than your competitors.  You sell in the blink of an eye, and double your investment.  Say you have $500k now sitting in the bank in you LLC’s name, in cash.  You can either choose to cash out 100% and pay capital gains tax on your earnings above your basis (at 15% I think?)... OR you can quickly find a new property with that $500k, purchase it, and file a 1031, which says you don’t have to pay ANY capital gains on those earnings.  You just increased income significantly without ever paying taxes on the underlying increase in value of your assets.  Rinse and repeat for 25 years, develop a portfolio of properties, create a management company so you can stop paying others a percentage of your earnings, and you too can have the problem of too much money.  I welcome anyone with actual knowledge of the topic to please expound on, or correct me. Rules of thumb? Sure - Put down 20% to pay no PMI.  The mortgage payment (including property tax) should be no more than 28% of your gross monthly income.  These two rules will certainly put a cap on the home price. If you have more than the 20% to put down on the house you like, stop right here. Don't put more down and don't buy a bigger house. Set that money aside for long term investing (i.e. retirement savings) or your emergency fund. You can always make extra payments and shorten the length of the mortgage, you just can't easily get it back.  In my opinion, one is better off getting a home that's too small and paying the transaction costs to upsize 5-10 years later than to buy too big, and pay all the costs associated with the home for the time you are living there. The mortgage, property tax, maintenance, etc. The too-big house can really take it toll on your wallet. Sorry, but I think you really do need an attorney here. This is the kind of minefield where knowing all the precedents and edge cases can make a huge difference in what you can or can't do, and a misplaced comma can make or break your case. Note that AT BEST you could sell your own interest in the house -- owning the note does not mean owning the property, it only means that they issued the note on the strength of your share of the property. And a half-interest in a single family house has little value outside the family, except to sell it to whoever owns the other half. Which is probably the best answer: Sell your half to your Aunt, if she can afford to buy it. She then gets sole control of the house, and you get the money you seem to need right now, and everyone in the family is much less stressed. Your house is not an asset, it is a liability. Assets feed you. Liabilites eat you. Robert Kiyosaki From a cash flow perspective your primary residence (ie your house) is an investment but it is not an asset. If you add up all the income your primary residence generates and subtract all the expenses it incurs, you will see why investment gurus claim this. Perform the same calculations for a rental property and you're more likely to find it has a positive cash flow. If it has a negative cash flow, it's not an asset either; it's a liability. A rental property with a negative cash flow is still an investment, but cash flow gurus will tell you it's a bad investment. While it is possible that your house may increase in value and you may be able to sell it for more than you paid, will you be able to sell it for more than all of the expenses incurred while living there? If so, you have an asset.  Some people will purchase a home in need of repair, live in it and upgrade it, sell it for profit exceeding all expenses, and repeat. These people are flipping houses and generating capital gains based on their own hard work. In this instance a person's primary residence can be an asset. How much of an asset is calculated when the renovated house is sold. I wish this was the case in Canada.  I lost about 60k on my home in one year and have to sell now to move for work.    In the US I could simply default and the bank takes the loss.  In Canada if I default, CMHC pays the bank, then I'm sued by CMHC and stuck with the bad debt.    Simply put - here the onus of repayment is on the lender, not the lending institution.  It sounds good until you are the one looking at losing your shirt. What you are suggesting will not work. Banks have strict guidelines about what they can and cannot do with an FHA loan property. Remember the FHA is only an insurance policy to the bank saying that if you default they will cover a high percentage of the loan.  The bank won't take the risk of violating their insurance policy and the government refusing to pay them off if you default. Instead, consider doing a creative sale on your property, maybe a rent to own deal or owner financing. As long as you pay the mortgage the bank won't even know you don't live there and you can rent the house out to someone who eventually will buy it after the timeframe expires. Meanwhile you can go and get a new home or condo either thru regular financing or owner financing(search the internet to see how to do this) and you can use owner financing until you complete the sale of the first house. Otherwise just tough it out in the house you are in until the time expires and then sell. You made no mention of the property value but I am assuming if you bought it 3 years ago that you may have a little equity. Pleas note that if you sell at that time though you will likely have to come out of cash because your equity won't cover the realtor fee and closing cost. But if you do the rent to own I suggested earlier you can sell at a slightly higher price making sure you can cover those cost. I realize this answer is a little out the box but I deal with people who don't want properties all day and I have completed transactions like this many times. Good Luck and God Bless!