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putting property in mortgage-need advise

Discussion in 'Money Matters' started by riefa, Jan 19, 2012.

  1. riefa

    riefa Bronze IL'ite

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    hi all..
    I am having confusion regarding property for mortgage. My husband has property (3 stores, 1 office and small parking) which he bought last year with his 2nd brother (75 percent paid my husband). Now my DH wants to buy cellular provider agency which will cost 15-20 lakhs. To obtain the money he plans to put that property which worths 50lakhs at the moment on mortgage to bank. His 2nd brother works in cruise line and has no objection on this. What i would like to know is
    1. Is it worth to put the property on mortgage to start the agency with net profit 50-70k per month?
    2. How is actually the procedure, how safe, how can we get it back, do we have to pay more?
    3. Can we still use mortgage property?
    Last question isn't related but please advise
    4. We plan to buy house on loan, do we need to have tax? How to apply?
    Thanks a lot for advise.
     
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  2. Kolaveri

    Kolaveri Senior IL'ite

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    Hi there,

    If the profit on the new business is an assured Rs. 50,000 / month it equates to 30% on 20 lacs / annum.

    This is definitely a good business.

    You can go for a loan on the existing property and the interest would be around 10% / annum which would be around Rs. 16,666 / month if you borrow Rs. 20 lacs.

    Business Returns = 50,000
    Monthly EMI = 33,333 (Loan Tenure 10 years, Interest Rate 10%)

    Nett Earnings / Month = 16,667

    If you do not see any expenses for this then you can buy a house as well and pay this amount towards the EMI.

    Before doing all this do make sure that the 75% and 25% share between the brothers is well documented.
    This will avoid unnecessary property tussles in the future.

    All the best.
     
  3. riefa

    riefa Bronze IL'ite

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    hi, thank you so much for your details info..
    Will do accordingly
     

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