Mortgage, BTL, Job quandry
Discussion
Morning,
Long time reader here. Over recent years my time spent reading PH has gone from reading the readers cars and specific marque forums to spending more time reading the business and jobs boards. I'd still class myself as a car enthusiast but in a passive sense without the desire to commit myself financially to something interesting.
I guess the above gives some context to my current thinking around what to do finance wise.
I am 34, married with no children. We live in the midlands where property prices are sensible. Quite happy in our current home and we have no desire to move to a bigger more expensive house. We both work earning a collective £85k between us with no debts.
Our mortgage is around £1250 per month with around 9 years remaining. We also kept our first house which is rented out and still has a mortgage attached to it. The rent covers all but £50 of the repayment so certainly no income coming from it at the moment. 9 years remain on this mortgage too.
Both me and my wife are committed to living a fairly modest lifestyle if we can become more time free and financially independent. We do not plan on having children so it's just the two of us.
We've got some cash that we could invest into another BTL (£30k) but I'm unsure as to whether this is the right move given the changes to taxation on BTL's coming in.
Whilst I earn a decent salary (£50k) I do not want to keep doing what I do for too much longer. My intention is to try and save as much as I can over the next 12 months with a view to starting a new chapter in my life this time next year. What that chapter is I'm afraid looks different each time I think about it.
Our friends are more interested in buying £500k houses and flash cars so the thought of a simple minimalist life is a bit alien to them which is why I'd be interested in the views of others.
My wife has started a sideline which she is expecting to earn around £1000 net from within the next 12 months. She would also like to go PT or finish work entirely.
I have a skill set which is fairly specific to my current role so unfortunately does not allow me to really do anything related on my own. Current thoughts for what to do on my own range from
> dog walking
> making something specific to the past time that I am interested in and selling for £10 per piece.
> buying and selling the odd car
> unskilled garden work developing my skills as I progress
Supplementing the above with some p/t work in a cafe maybe (10hrs) per week.
If we can do the above and bring in around £2k a month it feels like leaving regular work could be doable. What we don't want to do is end up killing ourselves to earn much less than we currently do and ending up with even less free time.
If you have got this far then well done.
My questions are,
> do we grab another BTL for £80k ish whilst we still have a salary that allows us to access the mortgage
> pay down our current BTL which has around £50k remaining leaving a much smaller mortgage
> invest in something different with the expectation of it generating an income 10 years down the line
> Try to remortgage our current home reducing the remaining term
> have I romanticized the idea of becoming time free with a low stress lifestyle?
Any thoughts on my wonderings are much appreciated :-)
Long time reader here. Over recent years my time spent reading PH has gone from reading the readers cars and specific marque forums to spending more time reading the business and jobs boards. I'd still class myself as a car enthusiast but in a passive sense without the desire to commit myself financially to something interesting.
I guess the above gives some context to my current thinking around what to do finance wise.
I am 34, married with no children. We live in the midlands where property prices are sensible. Quite happy in our current home and we have no desire to move to a bigger more expensive house. We both work earning a collective £85k between us with no debts.
Our mortgage is around £1250 per month with around 9 years remaining. We also kept our first house which is rented out and still has a mortgage attached to it. The rent covers all but £50 of the repayment so certainly no income coming from it at the moment. 9 years remain on this mortgage too.
Both me and my wife are committed to living a fairly modest lifestyle if we can become more time free and financially independent. We do not plan on having children so it's just the two of us.
We've got some cash that we could invest into another BTL (£30k) but I'm unsure as to whether this is the right move given the changes to taxation on BTL's coming in.
Whilst I earn a decent salary (£50k) I do not want to keep doing what I do for too much longer. My intention is to try and save as much as I can over the next 12 months with a view to starting a new chapter in my life this time next year. What that chapter is I'm afraid looks different each time I think about it.
Our friends are more interested in buying £500k houses and flash cars so the thought of a simple minimalist life is a bit alien to them which is why I'd be interested in the views of others.
My wife has started a sideline which she is expecting to earn around £1000 net from within the next 12 months. She would also like to go PT or finish work entirely.
I have a skill set which is fairly specific to my current role so unfortunately does not allow me to really do anything related on my own. Current thoughts for what to do on my own range from
> dog walking
> making something specific to the past time that I am interested in and selling for £10 per piece.
> buying and selling the odd car
> unskilled garden work developing my skills as I progress
Supplementing the above with some p/t work in a cafe maybe (10hrs) per week.
If we can do the above and bring in around £2k a month it feels like leaving regular work could be doable. What we don't want to do is end up killing ourselves to earn much less than we currently do and ending up with even less free time.
If you have got this far then well done.
My questions are,
> do we grab another BTL for £80k ish whilst we still have a salary that allows us to access the mortgage
> pay down our current BTL which has around £50k remaining leaving a much smaller mortgage
> invest in something different with the expectation of it generating an income 10 years down the line
> Try to remortgage our current home reducing the remaining term
> have I romanticized the idea of becoming time free with a low stress lifestyle?
Any thoughts on my wonderings are much appreciated :-)
I think your the only one who can really answer this. Have you stuck it on a spreadsheet to really test it?
You also dont mention your age, which has a big bearing for most people who will read this.
My thoughts.... buy the new BTL. Save like mad as you were already planning to wear down the mortgages as best you can. Converting those units into income generators. You always have the option of selling one down the line to pay the other mortgages off,
You also dont mention your age, which has a big bearing for most people who will read this.
My thoughts.... buy the new BTL. Save like mad as you were already planning to wear down the mortgages as best you can. Converting those units into income generators. You always have the option of selling one down the line to pay the other mortgages off,
Current buy to let regulations hit tax deductions above basic rate but more and more legislation and compulsory checks may follow or worse taxation.
Would need to really monitor what you spend and cut back to the level you are aiming for - review every 3 months or so to see if it's liveable/doable. (exclude commuting work clothes etc)
How much are repayments on two mortgages going to go up if interest rates rise 1% or 2%?
Are you going to want to go on more trips/holidays with more time on your hands?
Look at how much you earn per hour - compared to part time £8 or so and evaluate how much time & cost to make things (and also time and costs to sell) for a tenner (can do now and see how sales go at boot fairs etc and think about how many you can realistically sell in area year on year)
Should set a target as to how much you'd save over 1 year, 2 years or 3 years - then pay down 2 or 3 mortgages as much as you can while working - aim for income target from BTL or mortgage reduction target point to stop working rather than an absolute date.
Be careful about fixed periods on mortgages or wanting to move when no longer working as might get stuck on a high variable rate that costs alot more (on the basis that you don't earn enough to qualify for their lower more affordable rates!).
Whether go for another BTL or paying down existing mortgages would be you call based on your area etc
Would need to really monitor what you spend and cut back to the level you are aiming for - review every 3 months or so to see if it's liveable/doable. (exclude commuting work clothes etc)
How much are repayments on two mortgages going to go up if interest rates rise 1% or 2%?
Are you going to want to go on more trips/holidays with more time on your hands?
Look at how much you earn per hour - compared to part time £8 or so and evaluate how much time & cost to make things (and also time and costs to sell) for a tenner (can do now and see how sales go at boot fairs etc and think about how many you can realistically sell in area year on year)
Should set a target as to how much you'd save over 1 year, 2 years or 3 years - then pay down 2 or 3 mortgages as much as you can while working - aim for income target from BTL or mortgage reduction target point to stop working rather than an absolute date.
Be careful about fixed periods on mortgages or wanting to move when no longer working as might get stuck on a high variable rate that costs alot more (on the basis that you don't earn enough to qualify for their lower more affordable rates!).
Whether go for another BTL or paying down existing mortgages would be you call based on your area etc
Personal opinions
Big A1 said:
do we grab another BTL for £80k ish whilst we still have a salary that allows us to access the mortgage
NoBig A1 said:
pay down our current BTL which has around £50k remaining leaving a much smaller mortgage
YesBig A1 said:
have I romanticized the idea of becoming time free with a low stress lifestyle?
Go for it !!Could you get another skill before you leave your job? Then instead of £8/hr in a café you could earn quite a bit more laying bricks for example. Or could you do you current job on a freelance basis working two or three days a week?
Would it be better if you and your wife left your jobs at different times? so if her venture fails you still have your high earning job to carry you both for a while.
Get some advice from an expert like an accountant re BTL. If you could get a second BTL that would offer some financial security just in case you need it.
Would it be better if you and your wife left your jobs at different times? so if her venture fails you still have your high earning job to carry you both for a while.
Get some advice from an expert like an accountant re BTL. If you could get a second BTL that would offer some financial security just in case you need it.
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