Buy to Let in 2025

finchy_2020

Grumpy_chap said:

finchy_2020 said:

I’d also like to mention that we’re borrowing about £28k on top of what we need for the BTL (deposit + stamp + solicitor etc…) to put towards our honeymoon and personal house works. 

Your post is difficult to follow because of the way that personal and company income and expenses are mixed together.

The Ltd Co. will borrow (and be liable for repayment) of the extra £28k.  That funding will be in the Ltd Co., not simply available for a honeymoon etc.

We’re taking the extra £99k out of the house, funds are sent to a personal bank account, that is then used as the deposit for the house. Ltd company won’t be liable for the equity. 

WellKnownSid

finchy_2020 said:

Grumpy_chap said:

finchy_2020 said:

I’d also like to mention that we’re borrowing about £28k on top of what we need for the BTL (deposit + stamp + solicitor etc…) to put towards our honeymoon and personal house works. 

Your post is difficult to follow because of the way that personal and company income and expenses are mixed together.

The Ltd Co. will borrow (and be liable for repayment) of the extra £28k.  That funding will be in the Ltd Co., not simply available for a honeymoon etc.

We’re taking the extra £99k out of the house, funds are sent to a personal bank account, that is then used as the deposit for the house. Ltd company won’t be liable for the equity. 

I’m even more confused. Who exactly owns the BTL then?

caprikid1

finchy_2020 said:

Grumpy_chap said:

finchy_2020 said:

I’d also like to mention that we’re borrowing about £28k on top of what we need for the BTL (deposit + stamp + solicitor etc…) to put towards our honeymoon and personal house works. 

Your post is difficult to follow because of the way that personal and company income and expenses are mixed together.

The Ltd Co. will borrow (and be liable for repayment) of the extra £28k.  That funding will be in the Ltd Co., not simply available for a honeymoon etc.

We’re taking the extra £99k out of the house, funds are sent to a personal bank account, that is then used as the deposit for the house. Ltd company won’t be liable for the equity. 

I think the deposit will need to go into the company as a director's loan. You need to speak to an accountant as to how this works in terms of treatment for tax.

The problem with this strategy is those able to advice you on a BTL mortgage are unlikely to be able to advice you i this a good or bad decision.

With a strategy like this you need an IFA.

WellKnownSid

Yes, the Ltd Co isn't going to be able to expense the interest and costs for somebody else's BTL - so it's £15,600 profit.

Seems unlikely a brand new Ltd Co with no history is going to be able to get a mortgage.  I know when I first started out decades ago I couldn't even get a mobile phone without 3 years of accounts 

I'm not sure how this is supposed to work or what the Ltd Co is supposed to be achieving in this case.

RHemmings

theartfullodger said:

In November 1979 rates jumped from (?) 10% to 17%. I was lucky, my building society only went to 15%. It was painful (Thatcher's in ). Two salaries.

You young folk....

When that interest rate jump occurred, what was your approximate outstanding mortgate compared to your salary as a ratio? 

theartfullodger

£28k to "put towards" honeymoon?? So honeymoon will be even more than £28k?? Think, excuse my bluntness, your priorities need reviewing.

One of my honeymoons (married 3 times) was paid for (hotel & flights) by airmiles....

[Deleted User]

theartfullodger said:

£28k to "put towards" honeymoon?? So honeymoon will be even more than £28k?? Think, excuse my bluntness, your priorities need reviewing.

One of my honeymoons (married 3 times) was paid for (hotel & flights) by airmiles....

Similarly, I wouldn't spend £28k on a honeymoon, if I had a 40 year mortgage to service.

The implications to one's wealth cannot be overstated.

Based on £300k mortgage, the difference between 25yr and 40yr is £134,749

Forgo the honeymoon and extra repayments are more than covered for the next 25years.
There's probably even enough left over for something more modest....

I guess that everyone is different.

RHemmings

Or just a £5k honeymoon. 

donutandbeer

I really would like to know what kind of honeymoon this is going to be. Not trying to judge, just very curious (& nosy!)

finchy_2020

I think if people read the post correctly, there's £28k for honeymoon, house works, and a safety fund. Honeymoon, £8k-£10k (4 week trip around America), then the rest is for residential mortgage works, and around £5k as a safety fund.