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brighton'd

Buy To Let

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Hi Can someone answer a question for me?

I have a friend who has 2 properties both mortgaged.

One is a BTL IO and the other repayment and main home.

She got the BTL based on potential rental income.Her main residence mortgage is at her absolute max in relation to salary so couldn't get 2nd place by normal means

But she has never let it and uses it M to F for work and her other house at the weekends

Is this allowed?

Why doesn't everyone do it!

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Hi Can someone answer a question for me?

I have a friend who has 2 properties both mortgaged.

One is a BTL IO and the other repayment and main home.

She got the BTL based on potential rental income.Her main residence mortgage is at her absolute max in relation to salary so couldn't get 2nd place by normal means

But she has never let it and uses it M to F for work and her other house at the weekends

Is this allowed?

Why doesn't everyone do it!

Because we aren't all stupid.

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Because we aren't all stupid.

I couldn't agree more!

They are up to their eyeballs paying for both

I just thought that maybe the bank would ask to see accounts etc but seems I was wrong

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Hi Can someone answer a question for me?

I have a friend who has 2 properties both mortgaged.

One is a BTL IO and the other repayment and main home.

She got the BTL based on potential rental income.Her main residence mortgage is at her absolute max in relation to salary so couldn't get 2nd place by normal means

But she has never let it and uses it M to F for work and her other house at the weekends

Is this allowed?

Why doesn't everyone do it!

Sounds like one of those grey areas where if she manages to pay the mortgage(s) then everybody turns a blind eye. You definitely can't use a BTL mortgage on your main residence - but I guess she could claim that her main residence is the one where she spends her weekends.

Most people don't do this because for most people there's no reason to do this.

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Sounds like one of those grey areas where if she manages to pay the mortgage(s) then everybody turns a blind eye. You definitely can't use a BTL mortgage on your main residence - but I guess she could claim that her main residence is the one where she spends her weekends.

Most people don't do this because for most people there's no reason to do this.

Yes thats what she does

She is now going to sell the weekend place and try to buy another

I can't believe that the bank will port that mortgage at her age 59 to another without checking out teh BTL

The btl started out IO at 800 a month it has been about 150 for the last 3 yrs but they have saved nothing and their

deal ends soon

I am just amazed that this is allowed

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Yes thats what she does

She is now going to sell the weekend place and try to buy another

I can't believe that the bank will port that mortgage at her age 59 to another without checking out teh BTL

The btl started out IO at 800 a month it has been about 150 for the last 3 yrs but they have saved nothing and their

deal ends soon

I am just amazed that this is allowed

So does this mean that if they were letting it and making a huge profit every month no one would no and so no tax?

I can't believe teh Inland revenue don't ask BTL for accounts?

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Yes thats what she does

She is now going to sell the weekend place and try to buy another

I can't believe that the bank will port that mortgage at her age 59 to another without checking out teh BTL

The btl started out IO at 800 a month it has been about 150 for the last 3 yrs but they have saved nothing and their

deal ends soon

I am just amazed that this is allowed

If at first you don't succeed, eh?

Her lender may put the brakes on her plan, if she's lucky..

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If you do a tax return you're asked about income from property (and any costs to offset).

But if you don't do a tax return.... (e.g. if your main job is paye and you don't declare the rest of your situation...)

I think everyone should have to do a tax return to weed out those evading tax

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Yes thats what she does

She is now going to sell the weekend place and try to buy another

I can't believe that the bank will port that mortgage at her age 59 to another without checking out teh BTL

The btl started out IO at 800 a month it has been about 150 for the last 3 yrs but they have saved nothing and their

deal ends soon

I am just amazed that this is allowed

I guess that if she doesn't mention the BTL outgoings on the new mortgage application, and she's up to date with her payments, then the bank won't look any further. She'd be committing fraud and it may catch up with her down the line, but that's the chance you take*.

(*Given that the banks have been told not to pursue distressed mortgages it's not a bad gamble)

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If at first you don't succeed, eh?

Her lender may put the brakes on her plan, if she's lucky..

Do you think so?

She thinks I am over cautious!

The main house is about 60% mortgage 40% equity bought in 2008

They plan to sell and port the loan to another property same LTV ish I think just another area

I am aghast that they can as one is retired and other does work but age is a factor

I am more worried about them than anything else as these houses are all they have got no savings etc

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So does this mean that if they were letting it and making a huge profit every month no one would no and so no tax?

I can't believe teh Inland revenue don't ask BTL for accounts?

As another poster said, they do ask for you to declare your accounts on your tax return. However most people who do declare the income will offset it against mortgage interest payments. Many don't bother and commit fraud (no doubt feeling somewhat justified because everybody else seems to be committing fraud in one way or another)

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But if you don't do a tax return.... (e.g. if your main job is paye and you don't declare the rest of your situation...)

I think everyone should have to do a tax return to weed out those evading tax

Veering OT a little, but the PAYE system is fundamentally obsolete. It was designed on the assumption that everyone stays in the same full-time job for life, and generates disproportionate bureaucracy and inaccuracy whenever anyone changes jobs, does two or more part-time jobs simulantaneously with PAYE on more than one, does one PAYE job plus some self-employed work in addition to it (which is my situation) or is entirely self-employed. Let's just have done with it, remove the obligation of employers to police the tax system (which would reduce their overheads and thus stimulate job creation) and have everyone do their own tax returns.

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Veering OT a little, but the PAYE system is fundamentally obsolete. It was designed on the assumption that everyone stays in the same full-time job for life, and generates disproportionate bureaucracy and inaccuracy whenever anyone changes jobs, does two or more part-time jobs simulantaneously with PAYE on more than one, does one PAYE job plus some self-employed work in addition to it (which is my situation) or is entirely self-employed. Let's just have done with it, remove the obligation of employers to police the tax system (which would reduce their overheads and thus stimulate job creation) and have everyone do their own tax returns.

Indeed - what ever happened to Osborne's "Office of Tax Simplification" - have they come out with anything yet? This is one of those things that in the long run would be a huge simplification, but has a large 'hurdle' for 2-3 years whilst everyone changes systems and gets themselves sorted out.

You would think that merging Employers NI, Employees NI and Income Tax would be a quick win for simplification, but seemingly not... Let alone the insane obvious winners for simplicity, but not politically acceptable (scrap the elderly winter fuel allowance, and add exactly the same amount to the pension)

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I am amazed at this

I don't know how the banks decide who and how much to lend

These people could get into hot water here

I have spoken to them but I don't think they get it

The agents have told them the house has gone up by about 11% since they bought it whereas land registry says they have dropped there by 10%

I assume the bank check you out again?

Can retired people and those 6 yrs from retirement still borrow £££££££££££?

Thanks for all the info I plan to speak to them again

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125 percent rent over mortgage with accounts to prove it is usually a requirement of a btw mortgage. Astonishing if the bank has never checked. But if it became an issue could n`t she rent the second flat out to friend or family then sublet a room from her "tenant", I`m assuming it`s a two bed. That would square the accounts with the bank and HMRC surely.

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125 percent rent over mortgage with accounts to prove it is usually a requirement of a btw mortgage. Astonishing if the bank has never checked. But if it became an issue could n`t she rent the second flat out to friend or family then sublet a room from her "tenant", I`m assuming it`s a two bed. That would square the accounts with the bank and HMRC surely.

Well there are no accounts as they have always lived in it.

I just wondered if when they come to apply for porting new mortgage they may see the BTL on credit check and ask to

see accounts otherwise it would be considered an outgoing? Although they bought the house they are selling when they already had BTL and no one asked them.

Am concerned as they are getting on a bit and I don't want them to get into trouble (family)

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Well there are no accounts as they have always lived in it.

I just wondered if when they come to apply for porting new mortgage they may see the BTL on credit check and ask to

see accounts otherwise it would be considered an outgoing? Although they bought the house they are selling when they already had BTL and no one asked them.

Am concerned as they are getting on a bit and I don't want them to get into trouble (family)

Why don't they switch their existing BTL mortgage to a residential mortgage when they sell the other house, and then buy the new house on a BTL mortgage?

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Why don't they switch their existing BTL mortgage to a residential mortgage when they sell the other house, and then buy the new house on a BTL mortgage?

I don't think they would even think of that.

I personally don't get the 2 house thing but thats me

I don't think they earn enough to get a repayment on the BTL as it is IO and about 90% LTV and one of them has since retired and the other retires in 6yrs

How did they get into this I'll never know

Think the BTL was all in house the developer and estate agent arranged the mortgage

Even worse it is above commercial premises and they don't think that matters!

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I don't think they would even think of that.

I personally don't get the 2 house thing but thats me

I don't think they earn enough to get a repayment on the BTL as it is IO and about 90% LTV and one of them has since retired and the other retires in 6yrs

How did they get into this I'll never know

Think the BTL was all in house the developer and estate agent arranged the mortgage

Even worse it is above commercial premises and they don't think that matters!

Is the other property they wish to buy near enough her work so she can commute?

Edited by LiveAndLetBuy

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Is the other property they wish to buy near enough her work so she can commute?

No

2 completely separate areas.

They use the BTL m to fri for work for the one who still does

The other is just an extra (I know)

They will prob live in the one they are going to buy once the other one retires and then sell the BTL hoping it still has equity

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No

2 completely separate areas.

They use the BTL m to fri for work for the one who still does

The other is just an extra (I know)

They will prob live in the one they are going to buy once the other one retires and then sell the BTL hoping it still has equity

And how do they pay the mortgage on the one that they live in once they have both retired? Or how do they pay the capital if the repayment date is the same as the retirement date?

There are so many holes in this that I could use it as a fishing net...

Edited by Lennon

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And how do they pay the mortgage on the one that they live in? Or how do they pay the capital if the repayment date is the same as the retirement date?

There are so many holes in this that I could use it as a fishing net...

Not sure

The flat (btl) they bought 4 yrs ago IO 90% LTV

They use it for work

They pay both out of salary of the one that still works

The salary covers both mortgages just nothing more and they live off the others smallish

NHS pension

The BTL started at 800 month and now is 150 but that is up soon

The other is supposed to be main residence they bought it for retiring later but don't like area so its on market

They have a;ready seen one they like if it sells and I think they will be refused mrtgage this time as they are too old and too much debt. Won't listen to me though so I am asking for advice here

to explain to them why they cold end in trouble if rates rise and prices fall

When they bought the one they are selling both were still working

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Indeed - what ever happened to Osborne's "Office of Tax Simplification" - have they come out with anything yet?

Yeah, they reported (IIRC) early last year. So we've had about a year to forget it ever existed.

Unless the budget later this month comes up with anything (dream on).

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>I personally don't get the 2 house thing but thats me

>I don't think they earn enough to get a repayment on the BTL as it is IO and about 90%

me neither , i hate the idea i would be using other people to buy my home but i know a few buy to let couples and they are a certain breed , obsessed with status and how big their car is and alot of its being able to say ' we have tenants ' and ' 2 houses ' or more.

Personally i see buy to let as the cancer in the uk and also one of most socially destructive aspects of the country.I think it was buy to let that killed the future of millions who wanted to own homes but pension collapse and alot of other factors come in.

I dont think its morally right to own more than one home anyway but i guess i am in the minority.I just dont agree with the ethics of it and what it does to housing prices and how that effects kids and first time buyers.

The big problems again Greed and humans who are obsessed with status.Personally i judge those with more than one home and buy to let landlords in general like i judge arms dealers and politicians and estate agents , to me they are the Parasites of humanity and i have good faith all in the next life will be homeless and suffer the same fate they force upon others.

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