Ask the experts
About our experts...
At John Charcol, we are constantly asked for advice by borrowers on what they should do when it comes to mortgages. As such, we created this section so that you can submit your questions to our experts. The answers are provided by a number of people who have years of experience in the mortgage market. The team is led by Peter Woodward who spent his formative years as an underwriter with one of the major UK lenders and the last 10 years in our Technical Department along side Ray.
So please do submit your question and we will do all we can to answer it as quickly as possible
Please be aware that these answers can only be generic and no personal recommendations can be made.
Posted on 14/07/2010
My parents bought a flat in Edinburgh a few years ago and put both my sister and myself on the mortgage. This was to avoid paying inheritance tax on the flat should they pass away. I now want to buy my own flat in London, but don't know whether I still qualify for First Time Buyer stamp duty exemption. Please can you advise?
Categories: First-time buyer, Tax issues
Posted on 21/06/2010
My fiancé and I are planning to buy a house together. He currently owns a flat, but I am a first time buyer. If we buy the house in my name, could I then, at some point, sign half of it over to my fiancé's name, or would we then have to pay the stamp duty?
Categories: First-time buyer, Tax issues
Posted on 20/05/2010
Myself and my partner were discharged from bankruptcy in 2009 so a morgage in our own names is prety much impossibe as we live in rented and and have little disposable income to save the large deposits required. Because of this my father in law has purchased a property which we are going to live in, on a buy to let mortgage which we are going to pay. He will not make any profit on the rental income as it will purely cover the mortgage payments. The aim is to transfer the property to our names in a few years when we are in a better position. Will my father in law be liable for income tax on the rental even though there will not be any profit as such, and will he be liable for capital gains tax if we 'buy the property' from him at the outstanding mortgage balance?
Categories: Tax issues
Posted on 28/04/2010
When my wife was single she got a mortgage to pay for her father's house, the property deed never had her name only her father. She had to get life insurance and a endowment policy (which we still pay in) but the mortgage has been paid off. I own a property only with my name we want to buy a new property for letting. Is she eligible for First time buyer stamp duty relief since she has never owned a property although has had a mortgage before?
Categories: Buy-to-let, First-time buyer, Tax issues
Posted on 27/04/2010
An estate agent has advised me to pay part of a property with cash so it does not affect the 10% difference in the sale price and the valuation (that counts as our deposit). Is this legal?
Categories: Legal matters, Special circumstances, Tax issues
Posted on 17/06/2009
Are there any mortgage lenders out there that will take into account salary, child maintenance and tax credits when calculating how much they will lend?
Categories: State benefits, Tax issues
Posted on 03/04/2009
I have equity of 130000 in a property valued at 150000. I want to buy a second property to retire to in 3 years when I will be 60. In the meantime I would like to rent out this second property.
I have an income of £48000 and will have a final salary pension of £20000 + 60000 lump sum when I retire.
Should I buy the second property on an interest only mortgage to keep repayments down and settle the balance when I sell my existing property or is there another way?
Thank you.
Barbara,
Your suggested way of structuring this is eminently sensible. The maximum you can currently borrow on a Buy to Let (BTL) mortgage is 75% of property value but you will get a much better rate if you but down a bigger deposit and you will then also have a much wider choice of lender.
Therefore, unless you have enough savings for the deposit it will probably make sense to borrow some of the funds required on your existing residential property, also on an interest only basis. You will also be able to borrow at a cheaper rate this way.
You will still be eligible for tax relief on the interest providing you can show that the additional borrowing on your residential property is used to buy the new property. The best way to do this is to make sure the funds stay with your solicitor, who can then use them as part of amount sent to the vendor’s solicitor.
If you would like more specific advice, including tailoring how much to borrow on each property, please call us on 0800 71 81 91.
Categories: Buy-to-let, Interest only vs repayment, Legal matters, Remortgaging, Tax issues
Posted on 12/03/2009
I HAVE A MORTGAGE FREE PROPERTY WORTH(340000) AND WANT TO RELEASE MONEY AGAINST IT(10000)TO BUY ANOTHERPROPERTY.N.ROC SAY YES BUT NO TO LET IT OUT, I WANT TO DO THIS. IS THERE ANY COMPANY THAT WILL ALLOW THIS?
Many lenders will allow a remortgage where the additional funds are to be used as a deposit for a Buy to Let property. However, most have a minimum of around £25,000 for a remortgage.
If you are planning to take out a mortgage on the Buy to Let property you plan to purchase I suggest you consider borrowing all, or most, of the funds on your residential property as this will be considerably cheaper. It will still be possible to obtain tax relief on the interest payable providing the mortgage is set up correctly.
Categories: Buy-to-let, Raising capital out of property, Remortgaging, Tax issues
Posted on 24/09/2007
I have 240K equity in my flat which I want to release to buy a second property that I will live in. I would rent the current property out. My property has been valued at £300-£320.00K. The current mortgage is £60K The rental income has been estimated at £400-450 per week. I don't want to stretch myself to the max as there is a possibility of receiving large service charge bills on the current property within the next 5 years. My salary is £26K. What can I borrow and what are the risks? Would I have to pay tax on the rental income and on the either property in the event I sold?
Categories: Buy-to-let, Raising capital out of property, Tax issues
Posted on 07/09/2007
I live with my parents in a large house which has no mortgage. Is it possible to take out a mortgage so we can do some renovations? I will inherit 1/3rd of the house upon my parents death.
Categories: Equity release, Remortgaging, Tax issues, Unsecured loans
Posted on 04/09/2007
I am about to embark as a trainee solicitor with a law firm. My salary in the first few years will be low. Currently I earn £30,000. I would like to borrow c. £175,000 and I have a deposit of about £15,000. My parents might...
Categories: First-time buyer, Lower mortgage payments, Special circumstances, Tax issues
Posted on 04/09/2007
Dear Katie...My daughter and her partner, ages 35 and 37 respectively, own an immaculate end-of-terrace home in a slow-moving area but are anxious that their aspirations seem to be sliding fast away. They wish to...
Categories: Lower mortgage payments, New build, Tax issues, Valuations, Freehold, leases & unusual property
Posted on 01/09/2007
I am thinking of getting a buy-to-let mortgage and partly occupying the property myself at
Categories: Buy-to-let, Tax issues
Posted on 29/08/2007
My daughter is a nurse, 27, single and working in London. Annual income I believe to be £25,000, no significant loans or credit card debts. Are there any mortgage options available to her for a £180,000 flat which she has found?
Categories: First-time buyer, Lower mortgage payments, Shared ownership, Special circumstances, Tax issues
Posted on 20/08/2007
We are buying a second property that we wish to extend and then move into. The money for this purchase is secured on our current property which we have virtually no mortgage on and we do not wish to sell until after the...
Categories: Remortgaging, Second properties, Tax issues
Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not neccessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.
We recommend you seek professional advice with regard to any of these topics where appropriate.