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Living off rental income full time advice needed


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Hi,

 

I'm looking for advice going forward with regards to living off my rental income and future remortgages. 

 

I'm thinking forward and looking at the possibility of living off my rental income in the near future. I'm looking to save up a lump sum to live off initially and would like advice from full-time property investors. 

 

1st question is,

 

once living solely on rental income, how easy is it to remortgage your BTL's and home mortgage? Have you done this? which lenders do it and what criteria are they looking for the least? and what's a typical rate of the mortgage?

 

Most of my BTL's are on a 5 year fixed, 70% LTV and home mortgage is remortgagable in August 2018, 50% LTV.

 

2nd question is, 

 

Again living solely on your rental income, how many BTL's or cash flow would you have in your personal name before using a LTD company for other purchases? 

 

Would you buy in your personal name until your near the 40% tax rate? 

 

Thank you so much for your advice.

 

Have a great day

 

Paul

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Hi Paul,

 

My wife and I have done similar to Giles - we have put everything in joint names so we can share the tax allowances - with a Ltd company my understanding is you will pay 20% on all your profits, so as you have said, no real benefit in going with a Ltd company until you reach the 40% tax band.

 

We have remortgaged and released equity from a number of BTL properties and the building society have only taken into account the rental income from the specific property we were remortgaging and not my own income. Although they did want to know details of who I was employed by - so the fact you would not be employed may be a challenge - this is where having the Ltd company may help, as you would then be self employed and could demonstrate employment.

 

We have worked with Skipton International and used their Expat mortgages as we live/work overseas (but pay tax on rental income in the UK) - they have always been very helpful and speedy.

 

Cheers

 

Phil

 

 

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Hi Phil,

 

Thank you for your reply. All my personal BTL's are in my own name only, I got married last year so could I put some property in both our names? Sounds like I need a tax advisor to understand properly. :-)

 

I'm speaking to Iain Wallis soon so hopefully will be wiser. 

 

I also spoke with my Mortgage broker who said that your rental income needs to be able to x 4 of your home mortgage lending requirement. 

 

So for example, if you net £16k a year rental income x 4 = 64k is my allowed home mortgage lending. 

And BTL shouldn't be a problem to remortgage as it's on the asset, not personal income. 

 

Thank you again.

 

Paul

 

 

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On 04/02/2017 at 0:09 PM, Paul-D said:

Hi Phil,

 

Thank you for your reply. All my personal BTL's are in my own name only, I got married last year so could I put some property in both our names? Sounds like I need a tax advisor to understand properly. :-)

 

I'm speaking to Iain Wallis soon so hopefully will be wiser. 

 

I also spoke with my Mortgage broker who said that your rental income needs to be able to x 4 of your home mortgage lending requirement. 

 

So for example, if you net £16k a year rental income x 4 = 64k is my allowed home mortgage lending. 

And BTL shouldn't be a problem to remortgage as it's on the asset, not personal income. 

 

Thank you again.

 

Paul

 

 

Hi Paul

I am more or less same situation as yours, though majority of the rental income/ benefit were assigned to my wife in our unincorporated parthnership setup. Would be interesting to hear the follow-up after you speaking to Iain Wallis. With regards to the mortage broker advice, has he/ she taken intor the account of the new rules recently implemented for the BTL mortgages?

 

Regards

Tony

Tony-Ng.jpg

The Glasgow Meet up takes place on the first Thursday of every month, find out more here

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  • 1 year later...
On 2/4/2017 at 12:09 PM, pauldeehan said:

Hi Phil,

 

Thank you for your reply. All my personal BTL's are in my own name only, I got married last year so could I put some property in both our names? Sounds like I need a tax advisor to understand properly. :-)

 

I'm speaking to Iain Wallis soon so hopefully will be wiser. 

 

I also spoke with my Mortgage broker who said that your rental income needs to be able to x 4 of your home mortgage lending requirement. 

  

So for example, if you net £16k a year rental income x 4 = 64k is my allowed home mortgage lending. 

And BTL shouldn't be a problem to remortgage as it's on the asset, not personal income. 

  

Thank you again.

 

Paul

 

 

 

On 2/12/2017 at 9:44 AM, tony ng said:

Hi Paul

I am more or less same situation as yours, though majority of the rental income/ benefit were assigned to my wife in our unincorporated parthnership setup. Would be interesting to hear the follow-up after you speaking to Iain Wallis. With regards to the mortage broker advice, has he/ she taken intor the account of the new rules recently implemented for the BTL mortgages?

 

Regards

Tony

 

Hi Paul/Tony,

 

How did you both fare with the mortgage brokers?

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  • 2 weeks later...

@henry g obviously since the above there're some significant changes in BTL lending, I've a good local broker who helps me to navigate the challenges of getting the best products as a portfolio landlord (I understand my payslips certainly help!) 

Tony-Ng.jpg

The Glasgow Meet up takes place on the first Thursday of every month, find out more here

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