current mortage - BTL - question

[66Elan]

Jockman said:

98elise said:

Jockman said:

66Elan said:

More difficult to offset the mortgage payments against the rental income if the mortgage is not secured on the let property

Is it?

No its not, its the purpose of the loan not what its secured against that counts. If you're taking out a loan to buy a BTL it could be secured against anything, or even unsecured. It can still be offset.

Just make sure you have a proper paper trail clearly showing that's what the loan was used for.

That how I purchased my first BTL and my accountant was happy with the arrangement.

Having arranged hundreds of BTL mortgages over the last thirty years only a handful have been on a repayment basis and capital raising on a residential mortgage on an interest only basis is far more difficult now. Most clients with successful portfolios of investment properties want to pay interest only and do not want to repay capital. The paper trail is so much easier if you have a interest only BTL mortgage statement confirming the interest paid each year. Just my opinion.

[Ozzie Osmond]

13m said:

I have two pensions and property investments. Guess which of the three has done best over the past 10 years.

Have you factored in the CGT tax liability when you sell property?

Are those pensions well invested and are you calculating the returns from the correct "net invested" position, for comparison?

Don't forget the next 10 years will be different, with mortgage interest allowance now restricted to base rate.

[Sharted]

It would be traditional to raise the capital for deposit on your own home and do a BTL mortgage on the rental property.

[superlightr]

Sharted said:

It would be traditional to raise the capital for deposit on your own home and do a BTL mortgage on the rental property.

we are looking to get the whole value of the BTL from the extra added onto the exisiting mortgage. With the extra and current mortage its still only LTV of 55% with our income easily able to pay off full repayment mortgages based on 20 yrs mortgage. We plan to over pay as we have with other properties we own and clear in 10 yrs.

May have mentioned in other threads that I dont have a pensions (or a min one anyway) no stocks. We have maxed out isas.
like it being in my control, dont understand pensions, rules keep changing, understand properties being a letting agent. have a few other proeprties let already just adding to our income for retirement and then to pass on to kids or spend on uberfast cars and hookers. (trusts set up)

Edited by superlightr on Wednesday 19th October 17:22

[13m]

13m said:

I have two pensions and property investments. Guess which of the three has done best over the past 10 years.

Ozzie Osmond said:

Have you factored in the CGT tax liability when you sell property?

I have factored in the relative taxation associated with each vehicle.

Ozzie Osmond said:

Are those pensions well invested and are you calculating the returns from the correct "net invested" position, for comparison?

Yes they are and yes I have.

Ozzie Osmond said:

Don't forget the next 10 years will be different, with mortgage interest allowance now restricted to base rate.

Only for resi property.
Only for resi property held personally.
Only for resi property held personally with debt attached.

[NRS]

superlightr said:

we are looking to get the whole value of the BTL from the extra added onto the exisiting mortgage. With the extra and current mortage its still only LTV of 55% with our income easily able to pay off full repayment mortgages based on 20 yrs mortgage. We plan to over pay as we have with other properties we own and clear in 10 yrs.

May have mentioned in other threads that I dont have a pensions (or a min one anyway) no stocks. We have maxed out isas.
like it being in my control, dont understand pensions, rules keep changing, understand properties being a letting agent. have a few other proeprties let already just adding to our income for retirement and then to pass on to kids or spend on uberfast cars and hookers. (trusts set up)

Edited by superlightr on Wednesday 19th October 17:22

I'm certainly no expert, but is it not an idea to diversify somewhat? Both your job and investments are in housing, so if it gets hit you could have issues. Say there is a downturn and housing gets hit, you lose your job as there is not enough going on, so have to free up some capital. However it's mostly then tied to housing it seems, which would then be difficult to sell or you need to sell for an ever greater loss?

[superlightr]

NRS said:

I'm certainly no expert, but is it not an idea to diversify somewhat? Both your job and investments are in housing, so if it gets hit you could have issues. Say there is a downturn and housing gets hit, you lose your job as there is not enough going on, so have to free up some capital. However it's mostly then tied to housing it seems, which would then be difficult to sell or you need to sell for an ever greater loss?

Yes I would generally agree with that.
Although as a Self employed letting agent/business 40+years- so we are tied into housing in many ways. Housing in my local areas wont get hit as its very steady. We don't sell just let. People need houses to live in. Our landlords generally don't have mortgages and if they do they are not LTV maxed out.

I'm confident that I'm secure in the work and direction of investing and so have put all my eggs into one basket. My whole business and life is on lettings tbh. So boom or bust ! But to prevent busting we are taking funds out into our own properties to provide a separate income/pension and which is the safety net. Further funds will be from selling business in future.

I distrust pensions having seen my modest one having my retirement age increased without my consent and the value doing badly. I think pensions for my generation ie mid 40s non public will be seen as the biggest rip off hence why I want to invest in things I understand and can control.