Our sessions answer general queries as well as those specific to single parents and are of great value as many have similar issues.
We were joined by Bob Singh for a Q & A on mortgages on August 13th. He has 27 years experience in mortgages. As well as mortgages he is knowledgeable about life insurance, home and contents, wills and estate planning.
He has won 3 awards for his advice and appeared on LBC Radio, Punjab Radio, Zee TV and written articles for the trade press and local newspapers. Clients have had a good experience. Mortgages are a long-term relationship as they need continual reviewing. The company he runs is Chess Mortgages in Hillingdon.
Bob gave a background on the current market to begin with and then answered some questions that our members asked (in bold), around their situations. It was an extremely informative session, and we learned so much!
We’re a service-based country. All service industries have come to a stop, travel, tourism, restaurants etc. The country also relies very much on property. That’s why a stamp duty holiday has been given, because when people move house they want new furniture, new carpets, kitchen, bathrooms, electric, plumbing and it keeps all those trades very very busy, and therefore if people earn the government get taxes. If people earn, they spend, and it all goes to funding the national machine if you like. A good employment level is key, but as we all know lots of employers are now laying people off. That’s a bit of a cloud on the horizon. We don’t know how bad that will get and how adverse that will be on the property market going forward. There’s certainly a honeymoon period until March next year if you’re looking to buy, but after that things could slow down. So, your next step must be carefully considered before you do so. Property buying and investment is a long-term thing.
Now the planning rules have been totally relaxed you are able to do your extensions, and loft extensions until the cows come home. Councils can’t refuse and if you own land or a block of flats you can even put extra floors on there now. It’s a very good time for builders and developers. That’s purely designed to stimulate the economy.
Credit Scores are the be all and end all of mortgages.
With a good credit score you get headline rates, you can qualify, for example, a 5-year fixed rate at 1.6%. If you have a bad history/credit, that 1.6% suddenly turns into 4.6/5%. The difference in rates between a good rate and bad credit rate is 3 x more expensive, so it should be avoided at all costs. In another session we can talk about how credit scoring and assessment works, but today we’ll concentrate on an intro to mortgages.
The chances are a lot of you have mortgages. You’re living in a house possibly, either going through a separation/divorce. One of the partners is still there and one isn’t. When a separation happens and it’s a joint mortgage, or even a single mortgage the responsibility of the mortgage is whoever’s name is on that mortgage. It’s not the husband’s, the wife’s. It’s called a joint and …….liability. That means if he or she doesn’t pay, you have to pay because you’re as much as liable as the other party and you not paying affects not only your history, it will affect the other party’s history. So, you will both get a bad credit file and that will pretty much put the brakes on any future aspirations to either re-mortgage that property or get another mortgage either for a bigger property or another investment property. Credit score is the be all and end all of your mortgages. Some lenders are understanding. Anything in the last 12 months does cause an issue, so do try and avoid missing payments because they are key in the future in getting a mortgage. So that’s what the lenders look at, credit scoring. Your credit file is a 6 year rolling period. The further back in time the blip occurred, the better the chance of getting that mortgage.
If someone has a mortgage holiday due to Covid does that affect your rating?
It doesn’t affect your credit rating, but what it does affect possibly is your ability to get another mortgage whilst you’re still on that holiday. Most lenders won’t want to talk to you whilst you’re on that holiday. When you took the holiday, you were basically saying to the bank is “I’m in financial difficulty, I need a holiday.” Everyone who took one probably wasn’t in financial difficulty, but many saw this as an opportunity to save 3-6 months payments and maybe pay off some credit cards with the money they’ve saved. So, banks are saying, ok you said you were in financial difficulty, you took the 3-6 holiday, now prove to us you’re not in financial difficulty.
My ex is currently in the family home and hasn’t been paying the mortgage even though both our names are on the mortgage. I found out through a text message from my bank that he’d taken a mortgage holiday for 3 months. I was never consulted, even though both our names are on the mortgage. I’m now concerned what he’s done is going to adversely affect me.
It will if you’re looking to buy another property. It won’t affect your credit score, but your mortgage payments holiday will be reflected on your credit file. For example, if you do an Experian credit search, the mortgage balance will be going up in the 3 months since you’ve not made the payments. As soon as the holidays is over, he must start paying the mortgage back otherwise your credit score will adversely affect you. You’ll end up paying fairly high rates next time round.
A lot of people took holidays. We said take it if you have to, but if you don’t need to, don’t.
I’m in a similar situation. I’ve separated and my wife and kids are in the home. My name’s on the mortgage as well. Now if I wanted to get another mortgage, can I do so? We haven’t done a holiday on the other so what is the criteria for that?
So you’re named on a residential mortgage with your ex-partner?
Yes, we’re still going through the legal stuff and I’m renting.
You’re still a named party to that mortgage so therefore you are as liable as your ex. You have to go double affordability because the bank has to factor in the existing mortgage debt and the one you want next time round. Your salary has to be quite fantastic to cover both mortgages.
One way the banks look at it is, for example, your salary is £50k, you can get a maximum mortgage of 5xsalary, so £250k. Your existing mortgage is £100k, so they will deduct this from your £250k entitlement. You can then borrow £150k on your next one.
The other way they look at is they say you’re paying £500 towards that mortgage, what we will do is deduct that from your net mortgage payment as an expense, a bit like a car loan, for example, then do their multiplies and see what that qualifies you for. The second method gives you a higher entitlement.
If that house was let, your wife moved out and you both decided to rent it out with the lender’s consent. As long as the rent is meeting the mortgage payments on your matrimonial home, you can both go your separate ways and borrow maximum amounts.
Then the residential mortgage is pretty much disregarded as the rent coming in is more than enough to cover the mortgage and therefore not a burden to your net income. So they allow you full entitlement providing the credit history is good, you have the right level of deposit etc.
Lenders have got a bit nervous the last 3-4 months. Quite rightly, as no one knows where this thing is going, where it’s going to end. What the long-term impact is on property prices in the UK.
My question is if I’m working part (salary £18000) a year. Mortgage is currently £1170 a month. I want to buy my ex-husband out of mortgage. I know I have to remortgage for this and I get credit checked again.
What are the chances of the mortgage being approved?
“You don’t say how big the mortgage is. If you’re paying a mortgage of £1,100 a month, you probably have a mortgage of around £250/300k a month? I could be wrong, but if that’s the case you won’t be able to buy your partner out. You need to roughly work on a 4.5 income basis, 5 if you have no external debt, 4.5 x gross salary, 4.5 x 18=£81k. That is your capacity to borrow. I don’t think you’ll be able to buy him out on that salary, you’d either need to get an increase in wage. From your monthly papers I can see your mortgage is quite big, not small, so I’m guessing your ex-partner was the main salary earner, in which case you’re slightly disadvantaged because £18k is not going to go far. You could add the sale of the house to the £81k. That’s where you’d sit in terms of being able to get a mortgage, so 4.5 times income is really where you ought to be pitching your camp for your next mortgage, so if it’s anything bigger that that you’re not going to be able to buy him out.”
As a single parent I am stuck regarding my housing situation. If I rent, I am barely left with any money left at the end of the month and my benefits seem to be getting reduced each year based on my income. After 2 years I had to move back to my parents or end up in debt. I am currently in a position where I am living with parents and am able to save even though I currently shoulder the expenses. What are the chances of me being able to get on the property ladder? My earnings are not high as I work as a Higher-level teaching assistant. I know that there are schemes out there for key workers at the moment. I want to break the cycle I am currently in and do not want to apply for council housing and relay on benefits. I have a help to buy ISA which I am using to save towards a home.
I currently feel a burden to my parents both of whom do not have an income and would like to get this from their property but they cannot due to myself and my children living there.
It's good that you’re managing to save money, because any type of mortgage is only going to happen if you have the right level of deposit. Now, as I’ve said before, there are some lenders that can work on 10%, but preferably we need 15% deposit if you’re going to buy a property without any government schemes. Ok? So, 4.5 x your income, 15% deposit sort of gives you the indication where you can buy a property.
The Help to Buy ISA is good, you’ll get a bit of a bonus when you cash it in to buy your house and your solicitor will look after the paperwork for you.
You mentioned schemes for key workers, so just like I said before, lenders want professional people. There are some lenders who are helping heroes like military staff, NHS staff. They are giving that sort of category of people a little bit of an extra boost by helping them with higher multiples as well, so that could be a second avenue that we can look at for you.
The other avenue is obviously Help to Buy which is coming to an end shortly. It has been extended. The current scheme will come to an end next year. You’ve still got time to get on there and when it’s reintroduced it will only be to first time buyers. Right now, the help to buy scheme applies to first time buyers and home movers, so if you’re buying something, selling something, you will still be able to get the help to buy or if you’re a first time buyer you can also get the Help to Buy scheme. Now Help to Buy only applies to brand new properties. You must be the first owner and the building must be part of the Help to Buy scheme, so that’s something the builder normally sorts out. If it’s some help to buy eligible development, you can certainly buy in that development as a first-time buyer or as a home mover. Now, the good thing about Help to Buy is if you’re in the London boroughs, The Help to Buy scheme/government will give you 40% on top of your own 5% minimum as a deposit, so potentially you could go into a home with 45% deposit which is a great leg up into the property market.
Help to Buy has been used massively to help people buy their first home. There is bit of a calculation to be done. As it’s a government scheme they won’t lend more than what they feel that you can afford because the loan that the government gives you, 40% within London, 20% anywhere else is interest free for 5 years, but at the end of 5 years you will start making payments towards it. Banks being banks want to make sure in 5 years’ time if your salary, for example, doesn’t increase, could you still afford the mortgage payments on the base mortgage and start paying the equity loan back too? They don’t want the combination of these 2 payments to be more than 45% of your take home salary. So, if you’re looking for the Help to Buy scheme I’ll point you to www.gov.uksite, now that’s the government’s website. Tap onto the Help to Buy calculator and you’ll get some excel spreadsheets pop up from the Help to Buy department. You can put your own figures in there, play around with the deposits and the terms. You can see what maximum loan the banks will give you, but it’s the 4 x income tbh with you. You’re not really going to get 5x as that’s too much of a stretch to lend to you on a mortgage because in 5 years’ time you’ll be paying your mortgage as well as the equity loan. You could be paying a far higher percentage of your take home salary just towards the mortgage and may not have enough to live, eat and pay the bills etc. They’re very cautious when it comes to Help to Buy.
From what you’ve told me member 2, a Help2Buy scheme would be good, unless you’re in an area where 15% deposit and your income based on 4.5 x income gets you the house you want, because London is ridiculously expensive and it’s very hard for someone to start their life again in our neck of the woods. Where we are in Hillingdon, property prices are £400-600k. I know in the Midlands they are considerably less, 100/150 – 200K, so some people may even consider moving to theses areas and start a new life. If you really want to buy a property and you can’t buy in the South, then your options are then to relocate. This means finding a job in that area first because being a long distance from your work in relation to your property is a factor which can decline the mortgage because they know you can’t travel this daily. In the scenario for mortgage purposes, move to the area or get a transfer if you’re with a national employer. Once you’ve got that letter of transfer you can start looking for a property in that area. Or if you rent for a while over there, get your job and then apply. So, once you’ve been in your job for 3 months, we can make an application for you in your new location.
If you need any guidance on this, please get in touch.
My father bought a property in a relative’s name a few years ago as a BTL. He lives abroad so thought at the time it was easier to do it this way. He now wants to transfer the property into his own name jointly with me. There is a small mortgage left on the property which I would take on. Can I get a mortgage for this if the property is owned jointly with my father if he doesn’t live in the UK and is now retired (so no employment income to show)? Also, what’s the best way to complete this transfer and minimise capital gains or any other tax payable by the relative?
1) in terms of buying a buy to let property, is it better to keep minimum equity in the property and borrow as much as you can or vice versa?
2) what is the most tax efficient structure to buy an additional property in?
3) how /can you buy a property in your child’s name with a mortgage before they turn 18?
I don’t know what your situation, salary is or whether you own a home already. I’ll just explain some criteria, the sort of circumstances where you’re buying from a relative or parent is selling to a child etc. in these sorts of circumstances. Because it’s a buy to let, it’s not a regulated mortgage, which means that lenders are a bit more flexible on buy to let mortgages. Any mortgage or property that you have either lived in, live in, want to live in is regulated, and the only time a buy to let is regulated is if your relative lives there, or your children do, then it falls under a different set of rules and is no longer a standard buy to let mortgage.
Generally, Buy to Let mortgages are not regulated, not regulated by the FCA, so you don’t get the same protection with a Buy to Let mortgage as any advice received on a standard residential mortgage. That’s the key difference. So, when it comes to Buy to Let mortgages, lenders can be a bit more flexible. In this instance, my guess is that the father wants to buy it back with this member’s help. They don’t really want to pay a deposit towards it as it’s their property anyway, so why should they? What they’re looking for is a clean transaction where the ownership is transferred back into their name. So, what are the options?
They could clear the mortgage and pay the whole thing off so there’s no mortgage on the property and the relative can do a transfer from his name to the father and the member. That’s a clean transfer when there’s no mortgage on the property. There would be some tax implications because depending on how long this relative has owned the property, no doubt the property has depreciated in value. I’m not sure where it is, but I’m guessing it’s a long time. I’m guessing it’s at least 10-15 years, in which case the value has certainly doubled. Your father has made a significant gain on his property, so whenever you dispose of an interest in a property, whether it’s through gift or sale, particularly a buy-to-let property where there are no reliefs available apart from your annual capital gains tax allowance there is CGT, Capital Gains Tax liability. If and when this transfer is done your father would be liable for some capital gains tax. What we can do is refer you to a tax specialist. They can work out how much and you can make that call if you want to go down that route. Now, it’s best to get this done while your father is around, because I’ve seen situations where relatives have been given custody of a property and come the time when you want to get it back, issues arise and there are reasons for them to not give it back. The person whom you trusted as your relative, blood, best friend, suddenly turns into an enemy. I see that a lot, so you’re very brave to do something like this. Really now’s the time to get it back if the relative is willing to sign the papers and for you to get the mortgage if it is possible, if not with your father, then definitely in your name only.
With your father being an ex-patriot, I’m assuming he’s a British national, He would come under the ex-patriot category, so yes, he can join you on the mortgage. We do have some lenders who would entertain that, it might not be the best rate on the planet, but it might be easier to buy in your name because as you get older it’s not a really good decision to pass wealth up the line. People generally pass wealth down a generation so that you’re not liable for inheritance tax. There’s no point pushing wealth up. All you’re doing is increasing their size of pot for the tax man to take, so if you buy on your own, your father won’t have an asset base whether he passes away then you could possibly mitigate inheritance tax by buying in your name only. We can do that, you don’t need to put a deposit down. We can get you a little more money than what you owe on it right now in case you want to do some work to it, just to release equity from it generally. We can do that, but that money will go to your relative because you’re buying the property from him. It’s a sale and purchase transaction as if he was a 3rd party, so he will engage his own lawyer and you will engage yours. So, anything that the mortgage company gives you goes to the seller. You will need a watertight agreement so that his solicitor sends your dad the money because if he keeps it you won’t get it back, so you have to be very careful.
It’s always best to have debt on a buy-to-let, otherwise every penny of income from that asset is going to be added to your earned income and taxed accordingly. So, if there’s a debt on it as a basic rate taxpayer you get bit of an allowance. If you’re a higher taxpayer, then that income is going to be taxed at 40%. You want your interest to be at the maximum, so your next question leads on from this is asking what’s the most tax efficient way to buy an additional property?
Now this very much depends on your tax status. The way in which taxation works now is your gross rental income is added onto your earned income to see which band you fall into. If you ever file a tax return and you own a buy-to-let property, before it used to be your net profit that used to be added to your income and taxed. Now, all of the rent is added to your income and then they work out which band you fall in. So, getting £10k from a property may push you from a basic rate tax band to a higher one which might not be so tax advantageous. So, this is why I mentioned earlier, higher taxpayers do consider buying property in a limited company name, where the taxation is less, It’s 19%. Any gains on the property are at the corporation tax rates, not capital gains tax, so half. With limited companies you can be very clever in your tax planning. You can add on children as your shareholders. When they reach the age of 18, they can take a dividend from the company tax free as every person over the age of 18 has a tax allowance, just like you and I do. So, the first isn’t taxed. It’s a very tax efficient way for the children to get an income for their college education. Otherwise, if you leave it in your name, you’re going to be paying a lot of tax and having children as shareholders is a good thing because you are passing down the wealth to the next generation.
As I mentioned earlier, there’s no point building up your wealth to a level where it becomes an issue. You’re better off keeping your own wealth a moderate level/level you want or need and anything else pass down to the children now because that means any gain they make is for their benefit. It’s not for their benefit but the next generation, so any tax on that property is suddenly 50-60 years away, when you and I pass away. We have access to tax experts that can make this company for you in a special way, add you children on and we can do the mortgage. You can add your children on from birth. They don’t have to be 18, they can be 10, a baby, 5 years old. You can put their names as shareholders and really invest any future growth in that property into their shareholding.
So, it depends on your tax status as what you want to do. As anything, there are pros and cons. That’s why we want to look at what your situation is, and we’ll decide what’s best for you. What the tax advisor says. Yes, it’s a good idea if you buy a limited company, or you told me it’s not such a good idea. It’s a two-way dialogue, and the end result will depend on what you want as a client and we’ll tell you what is right from a tax angle. Tax advisors advise and you make the decision what you think is best for you, your family and your children.
The biggest fear in this type of scenario is giving children assets whilst you’re alive is what happens if they divorce/get separated? Will their spouse attack the shares of the company? So, these are all things that you need to consider before putting children onto your assets. There are ways of protecting that as well, but that’s the next level of sophisticated tax planning and we can also do that if the figures are right. It depends how simple/complicated you want your planning to be. Everything costs money, and you need to decide where you want to sit.
(A higher rate taxpayer is anyone earning more than £50k).
Part 3 of question from member 3 is, how can you buy a property in your child’s name with a mortgage before they turn 18? Simple answer is you can’t. Until you’re the age of 18, you haven’t reached the age of majority, you’re still a minor, you’re not able to enter into any financial contracts. As soon as you’re 18, you can be added onto a new mortgage if your parents want you to be.
For buy-to-lets the rules are a little bit stricter. We do have specialist lenders who allow children to be added on.
Bob, to get a dividend does the child have to be 18 as well?
They can get a dividend, but it’s taxed as your income before they do. So, when you have a company set up, you have shareholdings and typically decide on the shareholding for the family set up.
Unless, there’s one exception, if the grandparents give the deposit for the company buy-to-let, then the child would receive the dividend tax-free. This lowers the grandparent’s asset base and helps the grandchild.
Not all lenders allow more than 2 parties to a mortgage. So, if you did want a child added, not all lenders will entertain it. Most have a maximum applicant of 2, but by law you can have up to 4 on deeds. You can have a child above the age of 18 if you so wish. When you decide to do that, you can decide what proportion that child will own, whether it’s 1% or 5%, the house can be divided up into those proportions. That’s called a Tenancy in Common Agreement (TIC). The opposite of that is a Joint Tenancy, rather like a husband wife situation. In a joint situation if the partner dies, the survivor gets it. With a TIC, your share remains in your estate and it will be dealt with in accordance to your will, so when you do that sort of thing you not only have to make sure sufficient life insurance is in place, but make sure there’s a will in place.
I wanted to ask if there is any way of safeguarding future income (generated from a new source of self-employment) in my forthcoming divorce as I have now been separated for over a year?
Also, is money that I have invested in my children’s accounts safe from divorce? Is there any specific type of account that I should use?
If it’s income, you’re allowed to have income to sustain yourself. I don’t think that can be attacked by another party, particularly if you’re looking after your children. It would be worth checking with your divorce lawyer to be sure.
If they are minors, under the age of 18, any children’s accounts opened by the banks is held in trust, so these funds are not usable for house deposits, and they should not be able to be accessed by any ex-partner because these funds don’t belong to you. They are held in trust for the child. Trusts are a legal arrangement and even though you may not have realised it, if you open a joint account with a child those are called trust monies. They belong to the child, even you’re not really supposed to use it. I know you have access to the account, but they should really be used for the benefit of the child alone. We get instances where parents have been putting money away in ISAs and children’s accounts. When they come to buying a house, they say I’ve got £20k in baby X’s account can I use that as a deposit? The answer is NO. Lenders assess where every single penny comes from for a deposit when you buy a house. They want to know what you’ve cashed in and how you accumulated your wealth. The anti-money laundering act is very strict. Any money out of kilter with your wealth, earnings and status can and will be questioned. You have to be very careful how you present your financial picture. Separate your pots if you’re saving for a house and put it in your name only.
How often should our will be updated? And does an old will still hold? 10 years.
A will is valid until you supersede it, so if a will is made legally it is valid forever. It’s your last will so the only thing that will cancel the last will is if you make new one. Always tell someone where your will is when you make it. Don’t hide it/lock it away because no one will find it. We say you should review your will every 5 years, or when your circumstances change, for example, if you acquire another property, have another child, or if you don’t want to give your money to a particular person anymore. You can change your will as many times as you like, but there is a cost of course. . If you re-marry your old will is null and void.
(1) If you had a property in your sole name bought before marriage and the partner hasn’t made any contributions etc can you put the property in trust for your child to safe guard it and still live in it? Does this make sense.
(2) Is it possible to get a decent re-mortgage deal if you have a bad credit reference history.
Trusts are a very complicated piece of legislation. You can put things into trust, but most people don’t realise that there are tax implications to trusts. Taxation on trusts is quite onerous. Taxation on trusts is far higher than personal taxation. I don’t think there’s any need to put it into trust, because it would be seen as an avoidance measure to deprive the partner of your assets. That happens a lot in divorce, giving away assets pre divorce. It will get challenged and in law I don’t think you can do that. Whatever the assets are in the matrimonial set up are seen as joint under the Matrimonial Homes Act. For you to put that into a child’s name in trust would probably be seen as not the best move, but I think your lawyer could probably advise you better on this subject. I think it would send out the wrong signals to the court, but if you do that by negotiation it might be better. If you say this was a pre-marital asset, I want this for my child’s benefit only, that could be a point argued by your lawyer. As I say, in law the ex-partner is probably entitled to whatever percentage the court sees fit.
Yes, you can still get a mortgage if you have a low score. If you have CCJs, your choice of lender is the best of a bad bunch. It’s not the high street banks, they won’t look at it, unless the items are very small and distant in time. As we’ve said, your credit file is 6 years long on a rolling time scale. You can get a mortgage because there are lenders who totally ignore the credit score, they couldn’t care less. They look at what happened, why it happened, if there’s a plausible explanation. They’ll disregard the score and lend you the money, albeit the costs will be slightly high. Interest rates are very much related to risk. If you’ve not looked after your finances in the past, they might think you may not look after the mortgage, so they charge you a little bit more for that. The specialist banks charge more for 2 reasons, risk and margin as they have to pay their shareholders. Whereas the retail banks hardly give you any return on your deposits.
What happens if you’re on furlough then made redundant?
Probably in relation to a new mortgage application. If you’re on furlough, the employer was paying you 80% of your salary, so banks will only use 80% if you want to buy new. That was the banks stance in the early days, but now they’re realising massive job losses. People don’t really want to come back because they’re too scared or the work environment is such that members of staff don’t feel safe coming back, so they feel going forward when the furlough scheme ends there might be lots and lots of redundancies. So, what they’re saying now is we want a letter from your employer to say when you’re coming back to work. They want some assurances that you’ve still got your job at the end of the furlough. There could be a blood bath in a couple of months when people aren’t invited back because organisations have adapted. They’ve got people working from home. They may not need those fancy offices anymore. They might change their whole structure of working, how they deal with their client base and employees. There are going to be massive changes wholesale in the next 2-3 months, so for now if you are applying for mortgages make sure you’ve got a job. I personally wouldn’t advise applying for a mortgage when you’re in furlough, because who’s to say you’re not going to be laid off in 2 months’ time? How certain are you that you won’t be laid off? That’s why the lenders want some assurance that the income is still going to come in. It would be silly to borrow if your income could stop in 3 months.
A billion-dollar question, is it still the right time to buy or is it best for people to wait?
There’s certainly bit of a boom because if you were to buy now there’s the stamp duty holiday. For that reason alone, it’s a good time to buy. If for example, you’re buying a half a million house, you’re saving £15k on stamp duty, so after March you’re not going to get that. I would add property buying isn’t about gaining value in your first year, it could go down next year, but you’re not buying for a 1-year window. A mortgage property ownership cycle is 20-40 years long for some people, so don’t worry too much if a roof over your head is more important, then there’s no wrong time to buy.
If you’re buying for investment, that’s a different story. You have to be a bit more careful and look at your strategy. Are you buying well? Are you buying in an area which is going to flourish or increase in value? Is it on the HS2 route, for example, which has seen a lot of activity over the last couple of years. You need to look at the geography of the area, hospitals, universities, big employers. Which employers are laying off people? If you’re in a small town, and a big employer in the area is going bust e.g. steel industry, that area is going to be subdued economically for quite a few years. You have to look very carefully where to buy and what sort of area you’re buying in.
Long term property prices will fluctuate. As long as you can ride that storm, not sell in the time when property prices are low. You can always wait until property prices are up. You never make a loss until you sell. It’s only a paper loss. As long as your rental income is coming in, you’re managing to pay the mortgage, and the income is still coming in it doesn’t matter what it’s worth does it?
You were saying about adding kids to the mortgage, but you could add them as a second charge right as a percentage?
No, they have to be on the mortgage. If they’re under 18 they can’t be on the deeds. After 18, they can be. The lender may not allow 3 owners. If you really want to add the child on, we will have to take you to a lender that allows up to 4 people. Child doesn’t need to be earning anything to be on that mortgage. As long as parents are earning enough. Child must have good credit of course, so make sure when they go to uni you press the importance of good credit to them.
Teach children about credit profiles. Get them registered on Clear Score, so they can see if they’re not paying their credit cards on time. You can’t get a credit card until you’re 18. When it comes to money, they must be careful how they maintain their history because after uni if they do want to buy property their credit file is 6 years long. So, if they have a wild time at uni and spend money, not pay their bills etc. on time, when it comes to buying property at the age off 22/23, they’re going to be in trouble. Many people don’t realise the importance of it long term.If customers can’t find it, it doesn’t exist. Clearly list and describe the services you offer. Also, be sure to showcase a premium service.