Money, money everywhere but not a drop to spend
Discussion
Hi All
Hoping you can help me with a dilemma.
I bought a flat in London one year ago for a very good price. When I bought it, I took out a part interest only, part repayment mortgage. My LTV at that point was 70%
The current value today puts the LTV at 48% (highlighting the great deal I got, and the value increase). I've also had a pay rise in the interim (every little helps).
I want to release some cash to clear some expensive debts and also cover a big tax bill that's looming. Total = 20k
I thought a further advance would be the best option, but the mortgage provider is refusing on the grounds that I don't have a repayment vehicle in place for the interest only portion of the mortgage.
Can anyone suggest a way to release some cash?
Thank you
Sam
PS- just checked my mortgage paperwork and the early repayment cost is 23k !
Hoping you can help me with a dilemma.
I bought a flat in London one year ago for a very good price. When I bought it, I took out a part interest only, part repayment mortgage. My LTV at that point was 70%
The current value today puts the LTV at 48% (highlighting the great deal I got, and the value increase). I've also had a pay rise in the interim (every little helps).
I want to release some cash to clear some expensive debts and also cover a big tax bill that's looming. Total = 20k
I thought a further advance would be the best option, but the mortgage provider is refusing on the grounds that I don't have a repayment vehicle in place for the interest only portion of the mortgage.
Can anyone suggest a way to release some cash?
Thank you
Sam
PS- just checked my mortgage paperwork and the early repayment cost is 23k !
Would a repayment vehicle not be something like an ISA or similar? If I had the disposable to do such a thing, I wouldn't need the money to pay off the bills.
Am I missing something? Is there a way whereby the vehicle is cheap and would open the door to the approval of a further advance?
Am I missing something? Is there a way whereby the vehicle is cheap and would open the door to the approval of a further advance?
How did you get legged with that Wow !!!
For the maths to work the poperty must have jumped up by 45% in one year - without renovations this must be a truely amazing result.
Nationwide puts average London house price rises YOY at 7.2%
With so much equity you might be able to take out a second charge mortage ..however it's going to be expensive and not really a meduim or long term solution....
For the maths to work the poperty must have jumped up by 45% in one year - without renovations this must be a truely amazing result.
Nationwide puts average London house price rises YOY at 7.2%
With so much equity you might be able to take out a second charge mortage ..however it's going to be expensive and not really a meduim or long term solution....
Sarnie said:
^^This.
Please explain your thoughts.I understand why a lender would want all extensions to a loan to be used for the betterment of the value of the asset, hence my comment about refurbishment etc. What I wanted to know was, why would a tax bill be seen in any poorer light than debt consolidation?
Edited by SamPet on Sunday 12th July 20:30
SamPet said:
Sarnie said:
^^This.
Please explain your thoughts.I understand why a lender would want all extensions to a loan to be used for the betterment of the value of the asset, hence my comment about refurbishment etc. What I wanted to know was, why would a tax bill be seen in any poorer light than debt consolidation?
Edited by SamPet on Sunday 12th July 20:30
Lender not necessarily all about bettering the value of the asset, big incentive in ensuring that there is proof of ongoing affordability. Sarnie will probably explain it more eloquently than me though
hajaba123 said:
Personal tax bill? So probably accrued over 12-18 months tops and you're looking to refinance it over a mortgage term? Unable to pay the tax bill when due shows that income exceeds outgoings. Is the taxation error now fixed? What are the ongoing implications to your finances? Etc etc
Lender not necessarily all about bettering the value of the asset, big incentive in ensuring that there is proof of ongoing affordability. Sarnie will probably explain it more eloquently than me though
^Not really, that pretty much sums it up!Lender not necessarily all about bettering the value of the asset, big incentive in ensuring that there is proof of ongoing affordability. Sarnie will probably explain it more eloquently than me though
Lenders are all about "responsible lending" these days. Is it a good idea to lend someone money that they should have deducted from their income? Whats going to happen next year?
What you say makes perfect sense, however my situation is unique.
I bought the property off my siblings, and as part of the deal offered 1/3 of their combined Capital gains tax bill to sweeten the deal. So this is a one of bill, not something I'll be encountering every year, so not exactly poor fiscal management (albeit I have know for a year I'd need to pay said bill).
I bought the property off my siblings, and as part of the deal offered 1/3 of their combined Capital gains tax bill to sweeten the deal. So this is a one of bill, not something I'll be encountering every year, so not exactly poor fiscal management (albeit I have know for a year I'd need to pay said bill).
SamPet said:
What you say makes perfect sense, however my situation is unique.
I bought the property off my siblings, and as part of the deal offered 1/3 of their combined Capital gains tax bill to sweeten the deal. So this is a one of bill, not something I'll be encountering every year, so not exactly poor fiscal management (albeit I have know for a year I'd need to pay said bill).
Doesn't that equate to tax evasion on stamp duty?? I bought the property off my siblings, and as part of the deal offered 1/3 of their combined Capital gains tax bill to sweeten the deal. So this is a one of bill, not something I'll be encountering every year, so not exactly poor fiscal management (albeit I have know for a year I'd need to pay said bill).
Oops!! I wouldn't tell them that either.
SamPet said:
What you say makes perfect sense, however my situation is unique.
I bought the property off my siblings, and as part of the deal offered 1/3 of their combined Capital gains tax bill to sweeten the deal. So this is a one of bill, not something I'll be encountering every year, so not exactly poor fiscal management (albeit I have know for a year I'd need to pay said bill).
Who is your lender?I bought the property off my siblings, and as part of the deal offered 1/3 of their combined Capital gains tax bill to sweeten the deal. So this is a one of bill, not something I'll be encountering every year, so not exactly poor fiscal management (albeit I have know for a year I'd need to pay said bill).
walm said:
GT03ROB said:
Doesn't that equate to tax evasion on stamp duty??
Oops!! I wouldn't tell them that either.
What on earth makes you think that the OP didn't pay stamp duty when he bought the property?Oops!! I wouldn't tell them that either.
GT03ROB said:
walm said:
GT03ROB said:
Doesn't that equate to tax evasion on stamp duty??
Oops!! I wouldn't tell them that either.
What on earth makes you think that the OP didn't pay stamp duty when he bought the property?Oops!! I wouldn't tell them that either.
GT03ROB said:
He did but paid less than he should as he has agreed as part of the total compensation for the property to settle some of their CGT bill. If he paid full market value for the property fair do's. But it reads like he got a low price & in exchange paid some of their CGT thus reducing the Stamp Duty payable. This may not have been the intent but is what would have happened.
A fair market value was paid and the CGT contribution was agreed solely to soften the blow and therefore incentivise my siblings to sell.All 100% legal and above board.
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