macq
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Post by macq on Jun 8, 2018 14:55:01 GMT
2. Why do people use mutual/friendly bonds? e.g. I read of one recently that described itself as "medium risk" for 1.45% (possibly) with capital returned at 70% initially (possibly). not sure where you see that bond but i thought the idea of these bonds offered by the likes of NFU was that they are a safer product and tend to be more multi asset and you can even take the with profits option.But must admit i thought they had fallen out of favour along with endowment products due to the high charges and you normally need to hold for a good few years pretty much crossed with jlend
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cb25
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Post by cb25 on Jun 8, 2018 14:59:40 GMT
1. Does anyone know how a first time buyer can (legally) get on the housing ladder through BTL? i.e. initially let it out to help pay for it as can't afford to live there immediately. There was a case listed in the Telegraph recently where somebody -rents in location X, too expensive for them to purchase there given their income vs house prices -bought a property in cheaper location Y, then rented it out
Intention is to gain exposure to gains in the housing market and (I assume) make a little money. Not sure the risk/reward is worth it.
(may require you to be a subscriber to view it)
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zlb
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Post by zlb on Jun 8, 2018 15:13:07 GMT
1. Does anyone know how a first time buyer can (legally) get on the housing ladder through BTL? i.e. initially let it out to help pay for it as can't afford to live there immediately. There was a case listed in the Telegraph recently where somebody -rents in location X, too expensive for them to purchase there given their income vs house prices -bought a property in cheaper location Y, then rented it out
Intention is to gain exposure to gains in the housing market and (I assume) make a little money. Not sure the risk/reward is worth it.
(may require you to be a subscriber to view it) Shame, yes it is premium subscription only. I thought that the rules were that 1st time buyers aren't allowed BTL, perhaps she had backers.
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zlb
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Post by zlb on Jun 8, 2018 15:15:38 GMT
1. Does anyone know how a first time buyer can (legally) get on the housing ladder through BTL? i.e. initially let it out to help pay for it as can't afford to live there immediately. Rent it out like you promised in the mortgage agreement but also build a shed with a bed at the bottom of the garden and live there rent free. OK...! so how many FTBs rent out when they've signed a mortgage agreement that they won't (and in fact can't get a mortgage agreement to rent out, even just one tiny room (wonder whether that also applies to not being allowed to use airbnb, storage letting, and driveway)?
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zlb
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Post by zlb on Jun 8, 2018 15:17:24 GMT
Rent it out like you promised in the mortgage agreement but also build a shed with a bed at the bottom of the garden and live there rent free. OK...! so how many FTBs rent out when they've signed a mortgage agreement that they won't (and in fact can't get a mortgage agreement to rent out, even just one tiny room (wonder whether that also applies to not being allowed to use airbnb, storage letting, and driveway)? OK, so I can see there's been a change relatively recently - mortgages being offered to FTB BTL - bit late in the day - just when others are saying it's not worth it.
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stevio
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Post by stevio on Jun 8, 2018 18:07:46 GMT
Rent it out like you promised in the mortgage agreement but also build a shed with a bed at the bottom of the garden and live there rent free. OK...! so how many FTBs rent out when they've signed a mortgage agreement that they won't (and in fact can't get a mortgage agreement to rent out, even just one tiny room (wonder whether that also applies to not being allowed to use airbnb, storage letting, and driveway)? Do lodgers need mortgage company approval? Also a tax free amount Some savey (or rich) students bought and rented to other students when I was at uni
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zlb
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Post by zlb on Jun 9, 2018 7:34:29 GMT
1. Does anyone know how a first time buyer can (legally) get on the housing ladder through BTL? i.e. initially let it out to help pay for it as can't afford to live there immediately. Could you buy with a traditional mortgage, move in, and take in lodgers as opposed to tenants, perhaps? interesting...
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zlb
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Post by zlb on Jun 9, 2018 7:41:26 GMT
OK...! so how many FTBs rent out when they've signed a mortgage agreement that they won't (and in fact can't get a mortgage agreement to rent out, even just one tiny room (wonder whether that also applies to not being allowed to use airbnb, storage letting, and driveway)? Do lodgers need mortgage company approval? Also a tax free amount Some savey (or rich) students bought and rented to other students when I was at uni I wonder... would one get away with the 'lodger' term? Is there a definition eg must only live there part week, etc. Rich parents also buy up student any type of housing and get rent from students with non-rich patents. I'd heard they were also taking student loans when not required in order to invest the money. Think sl interest rate had increased since then...
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zlb
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Post by zlb on Jun 9, 2018 7:49:13 GMT
Another question on alternative investments, if a first time buyer wanted to buy a house and supplement income from a 'lodger' why do mortgage lenders not like that? Is it because the lodger may devalue the security?/refuse to move out/fear that you've not used a correct contract?
You can't live in your own property if it's been bought with a BTL mortgage... Anyone know why?
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r00lish67
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Post by r00lish67 on Jun 9, 2018 8:47:57 GMT
Another question on alternative investments, if a first time buyer wanted to buy a house and supplement income from a 'lodger' why do mortgage lenders not like that? Is it because the lodger may devalue the security?/refuse to move out/fear that you've not used a correct contract? You can't live in your own property if it's been bought with a BTL mortgage... Anyone know why? To the second question - It's because they've lent on the basis of a rental income (as opposed to your own earned income) that will then no longer exist. To the first - Re: lodgers, when I bought a house, no lenders wanted to countenance the idea of lodgers. However, clearly lots and lots of people take in lodgers, and by and large, they will have a mortgage (otherwise they're probably much less likely to want to bother to take them in). The government even has a tax break for 'rent a room'. My suggestion in the first instance would be to hit google hard with finding lenders that typically will allow lodgers (either upon application or perhaps once you're set up and running). It would obviously be far preferable to be on the right side of your mortgage lender. With the aforementioned tax break, it's really a great way to go financially when you're first setting up - like a shared house except you're in charge and the others pay your rent. Can't recommend it enough, but will obviously probably get tiresome after a while. Hopefully by then you'll be able to afford to cover the rent yourself. Best of luck.
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starfished
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Post by starfished on Jun 9, 2018 8:50:36 GMT
Another question on alternative investments, if a first time buyer wanted to buy a house and supplement income from a 'lodger' why do mortgage lenders not like that? Is it because the lodger may devalue the security?/refuse to move out/fear that you've not used a correct contract? You can't live in your own property if it's been bought with a BTL mortgage... Anyone know why?It is harder for the bank to repossess if you have defaulted, under a residential mortgage more hoops for them to jump through, etc. See the ridicolus recent story about the couple with the interest only mortgage with Santender. Under BTL, in theory a tenant can usually be given notice to leave. If no tenancy, harder to give notice. It is the same reason they ask adult people living with you in a mortgaged residential property to sign that they understand they have to move out if the person paying the mortgage defaults, it is paperwork to make a future repossession easier.
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zlb
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Post by zlb on Jun 9, 2018 8:54:11 GMT
Another question on alternative investments, if a first time buyer wanted to buy a house and supplement income from a 'lodger' why do mortgage lenders not like that? Is it because the lodger may devalue the security?/refuse to move out/fear that you've not used a correct contract? You can't live in your own property if it's been bought with a BTL mortgage... Anyone know why? To the second question - It's because they've lent on the basis of a rental income (as opposed to your own earned income) that will then no longer exist. To the first - Re: lodgers, when I bought a house, no lenders wanted to countenance the idea of lodgers. However, clearly lots and lots of people take in lodgers, and by and large, they will have a mortgage (otherwise they're probably much less likely to want to bother to take them in). The government even has a tax break for 'rent a room'. My suggestion in the first instance would be to hit google hard with finding lenders that typically will allow lodgers (either upon application or perhaps once you're set up and running). It would obviously be far preferable to be on the right side of your mortgage lender. With the aforementioned tax break, it's really a great way to go financially when you're first setting up - like a shared house except you're in charge and the others pay your rent. Can't recommend it enough, but will obviously probably get tiresome after a while. Hopefully by then you'll be able to afford to cover the rent yourself. Best of luck. thanks. Remember reading about that tax break at some point. Wonder whether anyone gained a criminal record from letting out rooms/property on wrong type of mortgage? Ideally I'd not live there as well as lodgers for first couple of years ... But the tax break is attractive...
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cb25
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Post by cb25 on Jun 9, 2018 9:00:09 GMT
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r00lish67
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Post by r00lish67 on Jun 9, 2018 9:03:26 GMT
thanks. Remember reading about that tax break at some point. Wonder whether anyone gained a criminal record from letting out rooms/property on wrong type of mortgage? Ideally I'd not live there as well as lodgers for first couple of years ... But the tax break is attractive... Ok, I don't get it anymore. You said initially that you "can't afford to live there immediately.". So how would this work? You'd buy a house which you can't really afford, rent somewhere else, and rely totally on keeping your lodger-tenants there all the time to cover the mortgage? This sounds like a bad idea to me - firstly as you'd be operating a BTL which would be against your ML terms, and which would also be traceable as you're renting elsewhere. Second, if you get a bad tenant, you're going to be totally screwed with 2 sets of costs and no income. Apologies if I've misunderstood what you meant (?)
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cb25
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Post by cb25 on Jun 9, 2018 9:06:17 GMT
thanks. Remember reading about that tax break at some point. Wonder whether anyone gained a criminal record from letting out rooms/property on wrong type of mortgage? Ideally I'd not live there as well as lodgers for first couple of years ... But the tax break is attractive... Ok, I don't get it anymore. You said initially that you "can't afford to live there immediately.". So how would this work? You'd buy a house which you can't really afford, rent somewhere else, and rely totally on keeping your lodger-tenants there all the time to cover the mortgage? This sounds like a bad idea to me - firstly as you'd be operating a BTL which would be against your ML terms, and which would also be traceable as you're renting elsewhere. Second, if you get a bad tenant, you're going to be totally screwed with 2 sets of costs and no income. Apologies if I've misunderstood what you meant (?) Also, I'm not sure the tax break applies if you don't live in the property ("Ideally I'd not live there as well as lodgers for first couple of years ... But the tax break is attractive...")
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