What happens at the END of an interest only Buy-to-let mortgage! | Buy to let property investment UK
Вставка
- Опубліковано 6 чер 2024
- When it comes to interest only mortgages I get asked about what do you do at the end of the mortgage ALL THE TIME. Due to the amount of times I get asked about this I decided to dedicate a WHOLE video to it!
Buy to let investments are not simple or easy. If they were easy then everyone would be doing buy to let property investing. Buy to let mortgages are really important because it gives us LEVERAGE and leverage is key for any property investor! I love buy to let property investments and they should be an integral part of your property investment strategy!
Over the past decade I've been immersing myself in all things property investment and I'm constantly learning about buy to let mortgages and picking the right product for my strategy.
If you want to chat further about all things property and want to learn more about investing with me or getting more training then message me on Instagram (@JamieYorkAspire) and start your message with "UA-cam" :)
Before you go make sure you've subscribed to not miss out on the latest property investment videos!
i want to invest in buy-to-let when i grow up. im 13
Bloody amazing that you’re starting to edu ate yourself now. Well done!
Fantastic!
Building up a deposit through my second job and really enjoying the way you deliver your video’s, I feel more and more educated after every one. Fantastic!
Great to hear!
Enjoying your videos. Nicely balanced and covers different points of views.
Genuinely the greatest UA-camr on property investment. Doesn’t talk shit, is realistic about timescales and answers every question I ever ask. Keep it up pal 👍
Another thing with Interest Only is, while property value (hopefully) going up over the years, and debt goes down(in current £ value) the Cash Flow that the property generates can be invested in other passive investments bringing 5-15% a year, therefore over a period of 30 years you'll probably be very comfortable and choose any option at the end of the term, easily and stress free.
Well said!
Jamie, I just wanted to say this, your videos are inspirational, the video about your first property investment detailing how you got ripped off by a so called joiner has stuck with me and reminded me of similar problems I have had running my business for the last 11 years. I call the experience of bad things happening lessons learnt, and hope to avoid the situation again by learning ways to prevent it. I turn 50 this year, I have a few buy to let’s and one commercial property. I am well aware that Tp maintain my life style of nice house, cars and travel, I need a very good passive income as I get older, your videos inspire me so much I just decided to remortgage all the rental property, put a deposit down on 3 terrace houses and a half a million pound commercial building, all on interest only. I have set a target to buy a further 18 terrace houses in the next 2 years. I look at house like a customer I my current fire alarm business. The good thing about houses you don’t need to keep replace them like you do customers when they leave if you increase your prices, the tenant might but it’s so easy to find a new one. Well done keep up the good work👍
Your videos are so so helpful!! Thanks for all the information!!
Hi Jamie just wanted to say thanks for taking time out to do all these video such a mind opener i own my own property and is looking to get into buy to let when my fix rate ends by remortgaging the property to open up so capital and by studying your video have really help me to understand the ins and outs more keep up the good work you've explained it better than anyone else on here that i've see cheers
Really appreciate the comment! Hope it adds value to as many of you as possible 😊
Thanks Jamie, another helpful video!
Brilliant content as normal, keep up the good work!! Thanks Joel
Thanks, will do!
Best channel I've subscribed to lately.
Love it!
Great video Jamie. Appreciate your work
Much appreciated!
Thanks for the video, I feel a so much more knowledgeable now now. You’ve answered a lot of questions I had. Great video.
You’re welcomeb
Another brilliant video Jamie!
Thanks again!
Another v informative video 😃 this guidance is so good. U r the property guru of the moment, Mr York! Many thanks 😃
Aw thanks! :)
Awesome video. Thanks mate!
Great content, thanks for this Jamie
Glad you enjoyed it!
very informative thanks Jamie
Thanks for the whole picture
Good value content yet again....
Thanks :)
Excellent video as always. Will you consider to add video giving ideas about age of properties in relevant to investment point of view please?
Real talk love it 😊
You're welcome :)
Hi Jamie.
I can see that for last 6 years I been doing it all wrong! Of course only seen your videos this week but never too late to learn something new and so useful. I was paying off my mortgage since 2016 mainly by hard work (some leverage by slowly building up a good credit score by using various CC for free interest "loans" using money raised by extra cash to pay 10% off each year on January). So I paid off my 30 year mortgage in 7 years (it would be 7 in April and I was planning to pay it off exactly on 7th anniversary od my 1st mortgage).
However, after your videos I have changed my mind.
Our current 4 bedroom house has been completely renovated by myself and some other builders who occasionally work for me). House needs no investment for at least a number of years. I wanted to sell it and move to a bigger house (I have 4 lovely kids) so my family can have more space and privacy and I could have a garage for tools and equipment.
Can I get a BTL mortgage for my existing house to rent it and use the equity from my house towards 75% LTV to raise money for the new bigger house? I know you would need the exact info regarding both houses but is that theoretically possible? Selling a completely renovated house (not just painted, the kitchen I have installed will outlast the walls and next generation of owners, same for bathroom). Makes no sense to sell it now as prices did drop on my area and house I want to buy dropped by 20k since September 2022. I could of course sell mine much cheaper and just get along with new smaller mortgage but after your great way of explaining BTL I am no longer petrified by the interest only mortgages as I can see you do use same principles as myself (I used free, extra cash from CC debt to repay most of my mortgage, sounds ridiculous but it did work well, 30y in 7y sounds lovely). I can see you also raise cash you don't have to wait years to earn in order to create capitol for BTL investment.
Sorry for long post I would prefer to write you an email so you can read it when you want (if you want of course) but I hope you read some of the comments and come across mine 😊
Ps. Very strange, my wife thought it's me doing a presentation when you were turned around, somehow we look 100% same when seen from behind (no pun intended 😀
Peter
Thanks for the great content! It would be nice to hear about investment for foreign buyers!
As always great stuff
Glad you enjoyed it
Great video Jamie!!
Thanks :)
Well explained
Your videos are really helpful so thanks! A lot of your videos are based on having multiple buy to let’s, however I’m planning on just having one buy to let for the time being. How would you suggest I pay the bank back? Would you save the money each month to repay them a lump sum at the end or would you just pay them when you sell the house?
Thanks!
Nice vid bro
Hi Jamie, thank you very much for another great video! I have a question (although not directly relate to this video's context - sorry), would you mind to help please: I have a buy-to-let property, which rear garden borders with a large local playing ground with peaceful hilly views, so we think that might be an opportunity for creating a 'shedcation'. Would you think it is worth doing so please? If so, do we need to apply for a HMO permission? btw, the rear garden is not in use by the tenant at the moment, and we will need to build a garden room there if 'shedcation' a good idea. many thanks!
Thank you for the great video
Thanks :)
The old adage used to be that if you can't make more money than the interest on debt, you should become a bank.
Leverage is generally preferable if you don't go down the LTCM route. The challenge for any newcomer to the industry is breaking that inertia and getting your first few properties. As long as you can finance the debt through business activity ... take it.
This was a very good video. Even if you are familiar with some areas it is always good to have a refresher.
I would love a video on inheritance tax on property, and the advantages of holding property in a company upon death/and giving away shares in company before death.
And how much life insurance should be obtained, to cover expenses on death.
Good suggestions
Would love to see in another video a review/demo of how you use Property Data
Great suggestion!
Thanks 4 you videos Jamie. Very informative. I think it's this video you share 150% coverage you prefer on each property. Which I assume is 1.5*mortgage = the rent. If I've got the calculation right. Why not go to higher 200%, it would mean more earnings and cash flow each month. For yourself, is the lower 150% to leave as much capital as possible for a next purchase as soon as possible? Cheers Guy
incredible thank you
Can you please do a video on how to check the legal packs for auction properties, in particular what to look for in the land registry documents which I find very confusing sometimes!? Recently I have seen a property which says a freehold but when you read the restrictions it has a lease of less than 5 years!
Good suggestion!
Shout out for Northern Ireland! Have 2 properties still worth less than purchase price in 2005 but both are on 85% lifetime trackers 0.2% over bbr. Best yield properties in the portfolio and three cheers for the bbr at 0.1% yeeow!
Wow...
Really well said
Cheers mate!
Great video. Thanks very much
Glad you liked it!
Yes please video about lending with life insurance… sounds interesting
Love the vids
Thanks :)|
Thanks Jamie
I have 2 BTL properties atm and I thought I will have to sell them when I retire at 65 . It seems that I could keep them for longer 👌🏻
That’s ok if you’re not planning to leave something for a loved one.
Hi Jamie,
Really enjoy your videos. Could an option be to seek the property at the end of the Interest Only mortgage and (hopefully) benefit from the property appreciation?
Do you have a video for the gaps in rental income? As it’s not always the case the property Will constantly be rented out.
Great content💥💥💥💥
Yeah!
Have you got a video on what to do with the surplus rent once the mortgage payment has been made?
@Jamie York ace video mate just so I’ve got this right Its a option to refinance at the end of my interest only mortgage at the new value of the property to pay of the original loan?
I’ve recently been looking into getting our wills done, and one suggestion, with regard to inheritance tax, was that you can refinance your houses to extract the equity, then you can either keep it and go around the world, or gift it to your beneficiaries (provided you don’t die within 7 years after)….which negates the need to pay huge amounts of tax when you die. Just a thought!
Interesting!
I was thinking the same to save inheritence tax........but ?????
Want to learn more about Buy-to-Let Investments? Download my free Buy-to-let guide here: bit.ly/jyboringvanillabtlguide
A wonderful video Jamie. What happens when you are stuck with a tenant who doesn't pay? It took me a year to evict a tenant and lost £17K in lost income and legal fees😢
Hi James! Could you do a video on "best BTL strategy" please?
Great idea thanks!
Hi Jamie- great video I love your content. Could I kindly request the key things an insurance policy would need to cover to protect a property portfolio? Cheers Alla
ua-cam.com/video/4qq5woJhtnc/v-deo.html Here you go
"GOT ME OUT OF 💩"S CREEK" Lol that literally cracked me up 👍🏻😂😂
😂 glad you liked it!
Hi Jamie thanks for this video again it is very helpful I just wonder how can we protect ourselves incase mortgage lender recalled the mortgage. I would like to know is there any insurance or any kind of protection?
Best speaking to insurance broker but I doubt mortgage lender will recall the mortgage
Great video again. Based on what Jamie said, should our first home mortgage be interest-only instead of repayment?
That's based on your personal circumstances 😊
hi Jamie would you do interest only mortgage on a residential property as a parent?
Hi Jamie,
- Suppose, I have more than one properties with mortgage and Sold one of that property as a part of down sizing/ moving to another place. As a result that made some money ( say 50k) after paying off for the new house . So can use that money to pay off my rest of the mortgage on another house and claim exemption from capital income tax ?!
Same with re organising the property, can sell the property with highest market appreciation to pay off mortgage on rest of the properties and claim exemption from capital gain tax ?!
Hi Jamie, I know this video (great content btw) was over six months ago but the algo just served it up to me. As an aside you mentioned something I have been interested in finding out more about ever since I came across in a book a while back. That is borrowing against an insurance policy, this book ‘The Five Day Weekend’ called it the ‘Rockafella Formula’ - supposedly it was a way they supercharged their wealth, and I have yet to find anyone who knows anything about it in the context of the UK. Did you end up doing a video on it or what would you advise as an avenue for further investigation? TIA
I still have this noted down to do a video about it
@@JamieYork well I’d certainly appreciate it. 👍
Hi
I’m from Adelaide ( Australia)
I have a question:-I have 2 invest properties and 1 owner occupied property. Should I pay interest only on owner occupied as well?
Thanx
I am a first time buy to let investor, my experience so far is than I am not sure why, but I am finding it hard to find property mainly 1 bed flat anywhere in England that I can mortgage with 20k as a deposit. Few things I have noticed is that. One most properties under 100k are cash only or they are been sold in auction. Two I find when contacting agencies the flat has an offer already and than I am too late. Am I missing a trick here? Any advice is welcome.
Refinancing will free up money to purchase more homes but if will put the mortgage rates up tiring up cash flow on the rental.
Hi John, quick question, do you know if can you use a LISA for a buy to let mortgage?
John?
Can you change from repayment to interest only on your own property with equity in the property
Can you recommend companies for decent life insurance polices covering property assets and also mortgage companies that offer 85 LTV.
Thanks
Another question about interest only or BTL. So if you pay the 25% minimum to get a morgage on BTL, realisticaly it means that you only start making a profit once you get the 25% back in rent (after taxes) ?
@Jamie York would you recommend an interest only mortgage on your main residence, if you are heavily insured?
Completely up to you on your own residential mortgage
What what you recommend doing with the income gained every month from renting? Save it up for a certain amount of years then use it as another house deposit ?
Down to each individual. I live off of mine and invest a load of it back into projects
Jamie
I’ve watched your channels for quite a while, so can I put this to you :
I have several properties that are nearly paid off , all rentals and this is what I was going to do ( with reference to car / house and good and bad debt.
I was going to fund a car through remortgaging one of the properties once they’re paid off , so in effect instead of the vehicle being 2-2.5 k a month ( yes correct ) I would have got a interest only loan on the property about £250 per month whilst collecting around £650-£750 per ,on the rent .
So in effect money in my pocket and getting the vehicle paid off with a remortgage straight away a d in effect the renters also paying the new loan
Or am I missing something ( and by the way - the vehicle will hopefully worth at the very least what I payed for it for it new for a while )
Your properties are nearly paid off? Is it on a repayment and interest mortgage? If not I’d switch to IO, and your mortgage costs will be a lot less and can most likely cover the costs of the car you want to fund. It won’t cost you anything at all. Apart from delaying finishing paying for your property another few years or so
@@ModinaShokeye yes they are and yes they are repayment and interest mortgages , I’m not sure what mortgage IQ is but il certainly take a look
@@stevelevick8705 sorry IO was just a quick way of saying interest only. But yes, I’ll definitely change it to interest only and leverage the loan that you’ve already been given. It shouldn’t cost you extra as you’ll be spreading out the loan you already have not just between the houses but eith the car also. You might find that you only need to do it on 1 or 2 properties depending.
Or you could technically remortgage if you haven’t done so in a while. You generally get lower rates and pay less each time, that way you can still pay off the property and interest at the same time. And you’ll have money left over for the car.
Definitely speak to a mortgage adviser, will be free to get advice from a professional 😅
£2-£2,500 a month? Are we buying a Ferrari?!
I'd refinance the properties onto a interest only and use the money pulled out to put into more properties until I have enough cashflow to cover the car payments instead of buying outright. It must be an expensive car to be able to keep its value AFTER you've bought it!
@@JamieYork I totally get pulling money out and changing my strategy ( repayment to interest only plan ) to purchase more properties and have seriously thought about it AND may still as I’m always looking .
I don’t think I would ever purchase a car ( Ferrari ? I wish , but it is an expensive and sought after car ) knowing my payments would be over 2k per month ( bad debt ) that’s why I thought of pulling money out and doing it this way .
If you would be so kind , I could do with a chat on the same subject ( properties) and tax implications or whatever the gov throws at us if I want to pass these properties on to the kids when the time is right , I have looked at lots of your vids and you do cover most things on every subject but I need a bit more info .
Don’t worry , I know you’re not a financial advisor or accountant lol as you highlight in your videos , just a bit of advice so I can maybe delve deeper .
Thanks
hi, what happens if you have been left the house you live in, and the mortgage needs paying off, but you are reliant on legacy benefits and pip, know ing you are sat on at least 250 k equity option please? thanx in advance
There wasn't a video tab for remortgaging
Hi Jamie, I find your videos very insightful and to the point. Really appreciate your work. Having spoken of WILLs in this video, I am wondering if you could please do a video on WILLs and TRUSTs. I have discussed this with a few brokers and everything goes over my head. But I am hoping I may understand with your style of explanation. Thx
Thanks for sharing! I will have a look
Yep, never pay off the debt initially and if you want to exit the industry then sell a few of your properties and that pays off for the rest of your property portfolio.
How can you get more than one mortgage do you need personal or business credit?
By the time your mortgage term ends, the LTV should fall significantly as a result of the increased property value compared to the fixed amount you borrowed. This means your interest rate should fall too. Going for interest-only leaves you with the option of freeing your cash for other investments but also with the option of paying off some of your mortgage debt each year (lenders usually allow you to make voluntary repayments of about 10%) instead of the *obligation* to repay under a capital + interest mortgage. If you experience cash flow issues, you may not want to repay the capital in the short term. But ultimately, it's a question of whether you know how to invest that cash elsewhere to earn you a higher return.
You’ve got it!
Say I bought a property for 120k with an interest free mortgage. I sell it for 300k 20 years later. I have 180k equity from the sale - can I just use this to clear the 120k mortgage? Seems too good to be true!
@@defaultdefault812 If you've got mortgage for 120k and you sell the property 20 years later, the presumably you've been making repayments against that mortgage over the years (interest free or not). The outstanding balance would be pretty low by then - if not completely paid off.
If you meant an interest-only mortgage and the full loan of 120k was still outstanding and you sold the property for 300k, then you would simply pay off the 120k balance and keep the 180k for yourself.
@@mak.ak.uk.yup and then sleep in the streets cash rich.
@@defaultdefault812what’s the plan after selling your house and being homeless?
wow really enjoyed this very informative. Quick question, can you have a life insurance on buy to let?
James thank you for your videos ,I'm Staircasing property to 100% next week I really don't know if I should go for interest only or no on 85%LTV?do you have office number mate?
Sadly I don't but feel free to reach out on Instagram @JamieYorkAspire
Who is your life policy with?
"A hundred k here is fuck all"
Wise words for us all to live by.
😂 I’m not exactly delicate and I 😉
Just a hypothetical situation. If I get a 20 year interest only mortgage fixed for 5 years. If the house prices and interest rates are roughly the same at the end of the fixed term. Can I get another interest only mortgage before the variable rate comes in on year 6 and get another 5 year fixed term? Hope this makes sense 😊
Yep . Just remortgage before end of 5 year fix
What happened in the USA with over leveraged mortgages
Jamie what is your strategy to pay down the morgage eventually?
Or do you chip away 9ver time to bring your mortgage debt down?
I don't pay it down
@@JamieYork so you have life assurance? If you pass away that's what pays off the morgages? Do you just put the 25% deposit required and take rest off in morgage?
Hi Jamie, great channel. I've looked for the answer but can't find it. Why do interest only buy to let mortgages ask you to pick a 'mortgage term' 25 years etc, because as it's interest only the term doesn't matter?
There still needs to be a term for any loan
If someone bought a BTL interest only for £100,000 for example, and the property increased in value to £150,000 a few years later; if they sold the property, would that £50,000 profit go to you or would it go to the bank because you havn't paid any of the capital on the property and just the interest.
Informative I have a large sum I've inherited what would you advise investment wise ?
Under £5K buy a property course and the rest in a stocks and shares ISA
Under £100K educate yourself on property investment (doesn't have to be through me) and purchase a BTL
Over £100K+ Let my team sort you out with some property ;)
@@JamieYork it's over £100k but not sure about the market etc where's good etc
DM me on insta mate @jamieyorkaspire. Happy to chat one to one
@@JamieYork don't have Instagram do you have an email
If I saved enough can I pay loan debt off and keep my buy to let house ?
Yes!
What can you do if the renter doesn't pay the rent in your property? Can i get interest only mortgage for a residential property? If i apply for a buy to rent, interest only mortgage, can i use the property as my residential ( wil it be worth it?)?
If they don't pay you rent send the proper paperwork to evict them.
i creased it when he said its fuck all
Haha, glad you like it!
It's rare that I laugh out loud at any comment on UA-cam, but on hearing yours at 8.45, I nearly pi$$ed myself.
Another insightful video, thank you.
😂💪 glad you liked it!
Is it risky to have a 75% LTV on a property during times where house prices are expected to have a correction? Or would you consider that a ‘too risky’ investment at the moment. I don’t have the luxury of a deposit any more than 25% and I’m considering my risk management.
A correction will not be more than 25% so not many people will be in negative equity
Fearmongers have been talking about a correction for a decade.
It didn't happen following 2008 (only resulted in a dip for a while), and it certainly didn't during or after the pandemic.
Properties are in short supply and they are not easy to produce in a short amount of time. Properties are also not a luxury good that one can avoid, which means either people want to continue buying (so prices increase) or people will have to rent (so rent rates increase).
@@mak.ak.uk. not sure where you are, however properties in many areas across the uk took years & years to recover, up to 2008 values!
Hi, If I remortgage my house and bought few buy to let interest only mortgage, is it a good idea to payoff my house using cash flow from rental properties?
Yes or just buy more rental properties
That's exactly what I'm doing with one of my btl's.
Education
Thanks for reaching out! Go to bit.ly/aspireeducation and fill in your details :)
Hi Jamie. My parents in-Law are at the end of their 30 year mortgage both aged between 60 - 63 they still owe £103000 with an interest only mortgage. Should they extend the term if possible or sell the property to me and my wife for 103,000 then we would take on the mortgage. The house is worth around £168,000. Any advice would be very much appreciated.
Depends what you want? Do you need to sell? Do you want to keep it?
@@JamieYork we would like to buy the house off them and they continue to live there. We be taking the mortgage on. They seem to think they can not extend as they both no longer work. Only living off private pensions.
Jamie. On a different subject . What can one do if a family is left a property and the power of attorney refuses to lower the price even though there has been no views, no interest . Not 1 viewing at all.
Thanks
Talk them into selling it for less
Hi Jamie, what's the best way to buy a buy to let? Loan or mortgage?
The Mortgage interest from the bank is most likely less than a private loan company
Mortgage every time
Thanks
A mortgage is a loan
Is there anything in the fine print of the mortgage contract that gives the lender the right to force the homeowner to pay off the debt early? For example, if there is a recession and the lender is facing financial difficulties, can they legally force the homeowner to pay up the entire amount borrowed within a month's notice or face repossession?
Not that I've ever heard of
Proprer banks/lenders will not/never run out of money.
@@tinaforbes1059 TRUE THAT!
The only one I can think of is where your direct debit doesn't reach them on time.
❤️
You draw cars like I do 🚗
Is that a good thing?
< is less than
> is greater than
in respect of the ages mentioned.
Yep 👍
Could the properties just be sold after death if required with no capital gains for who ever inherits ?
If you sell after you've died then you'll still have to pay CGT/IT
@@JamieYork Great video.
Being over 60 I have looked into this and in some cases it cannot quite be nailed down as precisely as i would wish...
Under current legislation death wipes out Capital Gains tax (CGT). So on death, neither the estate, nor the heir(s) would ever pay any CGT.
If an heir inherited the property AND did not live in it as his/her main home and then subsequently sold it, then they would have to pay CGT on the increase in value from the date of death to the sale of the property, if the increase in value is above the capital gains tax (CGT) allowance which currently is £12,300 per individual owner, then CGT would be payable at either 18% or 28% (current rates).
If the estate "on first death" is left to a spouse/civil partner then there is NO inheritance tax (IHT) to pay, even if the estate is worth many millions. On "second death" potentially up to £1 million can pass to children/grandchildren with no CGT and no inheritance tax (IHT). If the estate is worth more than £1 million, some inheritance tax will be payable at 40% of everything over £1 million.
So after death, under current legislation, there is no CGT to pay. BUT if the estate is worth more than £1 million, then a grant of probate will not be granted unless the estate/the heirs first pay the inheritance tax. Without a grant of probate, the executor could not sell the property.
So the estate needs enough cash to be able to afford to pay the IHT, before the executor will have permission ("probate") to sell the property OR, in this situation a life insurance policy "written in trust" may help - but sometimes HMRC will award probate "on credit" and give the heirs up to 10 years to pay off the inheritance tax.
In this case, which I have been told is at HMRC's discretion, HMRC would charge interest. Hopefully in this case an alternative solution would be that a bank would agree a bridging loan to pay the IHT and not need to be repaid until the property has been sold. But in this case the executor would need an acceptable credit rating...