BTL considerations

jamiefly

My family bought our own home two years ago with a mortgage and 25% deposit that I transferred to my wife. My intentions were that she take out the mortgage solely in her name as my income is quite variable. However the bank would only consider a joint application and I took a 1% equity stake (and wife 99%).

I have ~£80k cash and would now like to invest in a couple of buy to let properties in my name and have been agreed in principle a mortgage of £120k the numbers stack up.

My only worry in the event of business failure (I dearly hope not) then the lenders would place a charging order on our marital home too and force sale even though I only have £400 of equity in that property.

I really wanted separation financially as this concern is stifling my ability to leverage risk for a better return on my capital.


Ultimate goal is to have two investment properties fully paid off before retirement as one source of pension income.

What are my options please?

kingstreet

If the debt is in your sole name and the property is jointly owned, it's a restriction, not a charging order.

https://forums.moneysavingexpert.com/discussion/comment/57492495#Comment_57492495

Thrugelmir

jamiefly wrote: »

My only worry in the event of business failure (I dearly hope not) then the lenders would place a charging order on our marital home too and force sale even though I only have £400 of equity in that property.

Could be viewed that the arrangement put in place was artificial. As your wife's income was insufficient to fund the mortgage alone. So the 99%/1% split might be overridden in court if a charge was applied for.

jamiefly

Thrugelmir wrote: »

Could be viewed that the arrangement put in place was artificial. As your wife's income was insufficient to fund the mortgage alone. So the 99%/1% split might be overridden in court if a charge was applied for.

This does worry me - part of the reason for doing this in the first place was down to the risks I have taken with my capital and this is a flight to safety from spread betting and other investments where the factor was 20-30x invested sum.

My wife's income more than covers the mortgage requirements at only 1.5x her sole earnings, would this make a difference?

(I was surprised that the bank wanted me named on the deeds tbh as at times I have been very much under water and upto my eyeballs on credit cards and loans just to meet various liquidity/float requirements and halt stop losses etc although never missed a minimum payment).

kidmugsy

jamiefly wrote: »

this concern is stifling my ability to leverage risk for a better return on my capital.

Your options include accidentally leveraging risk to wipe out your capital and your wife's. Consider the events of 2008 and their consequences, as they transpired especially in the USA, Spain, Ireland .....