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Original poster

Mortgaging our owned home

131 replies

Missmummy88 · 24/02/2022 12:16

Any downsides I should be aware of putting a mortgage on our owned home? Current value about £550000 - fully owned by me ( gift from parents) with a long term partner 13 years & 3 kids and very happy. We want to get a small mortgage to add a 4th bedroom and new kitchen & redesign downstairs. This will allow each child to have their own room & make the house more liveable ( currently layout is awkward with kitchen & living area opposite ends of house having to walk betweeen 3 rooms. We want to do this now rather than when kids are older (hence mortgage rather than Saving) we both have jobs and currently save my wage & spend dh (although I work part time so circa 13,000 a year saved)

Is there anything I should be aware of? Any precautions I should take?

OP posts:
hellithurt · 24/02/2022 14:37

[quote frgh]@hellithurt yes I paid it last year when I sold an additional property. [/quote]
But who is selling a property?

frgh · 24/02/2022 14:38

@hellithurt why would you not have to pay it?

hellithurt · 24/02/2022 14:39

[quote frgh]@hellithurt why would you not have to pay it? [/quote]
Pay what??? Who in this scenario is selling or sold a property??

frgh · 24/02/2022 14:39

@hellithurt you don't have to sell something to incur a CGT bill.

hellithurt · 24/02/2022 14:40

[quote frgh]@hellithurt you don't have to sell something to incur a CGT bill. [/quote]
Ok, so explain to me where the CGT liability would've arisen?

frgh · 24/02/2022 14:42

@hellithurt what do you mean? As I said I assumed the parents were still alive & therefore still in need of a home so the gift was an additional property.

Dixiechickonhols · 24/02/2022 14:42

You both need separate independent legal advice. If it’s your home what provision do you have already for your partner if you die? Have you left it to him in will. If not who have you left it to/intestacy. Plus possible iht issues - would it have to be sold to pay tax.
Can you get big enough mortgage on your salary? Partner has no asset to mortgage so can’t be a joint mortgage unless joint asse.
You need to think carefully. Do you want boyfriend to have a legal share of your property or be at risk of him trying to claim a beneficial interest if you split. At the minute he has no rights - you split tomorrow you can ask him to leave your house.

CAB has decent guide re cohabitation v marriage.

EinsteinaGogo · 24/02/2022 14:43

[quote frgh]@hellithurt you don't have to sell something to incur a CGT bill. [/quote]
Frgh,

As far as I'm aware, you only have to pay Capital Gains tax when you sell an asset that is not your main home.

The CGT is paid on the positive amount of increase over what you paid for it.

Therefore if OPs parents gave her the house as a gift, they made no profit hence no CGT applies.

frgh · 24/02/2022 14:44

@hellithurt I also asked how long ago it was gifted as that wasn't clear.

hellithurt · 24/02/2022 14:45

[quote frgh]@hellithurt what do you mean? As I said I assumed the parents were still alive & therefore still in need of a home so the gift was an additional property. [/quote]
That's a fuck load of assumptions based on a li r saying it was gifted!

Perhaps it was their primary residence, they gifted it and then bought a new one?

But it's totally irrelevant and I've no idea why you would ask?

Are the HMRC police?

hellithurt · 24/02/2022 14:45

[quote frgh]@hellithurt I also asked how long ago it was gifted as that wasn't clear. [/quote]
What's tomes ale got to do with it and why's that your business?

frgh · 24/02/2022 14:45

@EinsteinaGogo yes main home is exempt from CGT but it wasn't clear to me that it was the main home.

hellithurt · 24/02/2022 14:46

*timescaje

TheHoptimist · 24/02/2022 14:46

Therefore if OPs parents gave her the house as a gift, they made no profit hence no CGT applies.

not accurate
everybody would just give stuff away to avoid cgt

how do you know they made no profit- the value is the value on transfer

hellithurt · 24/02/2022 14:47

[quote frgh]@EinsteinaGogo yes main home is exempt from CGT but it wasn't clear to me that it was the main home. [/quote]
And it was none of your business and totally irrelevant

frgh · 24/02/2022 14:48

But it's totally irrelevant and I've no idea why you would ask?

As I said upthread I think any question around tax is relevant when the OP wants to remortgage. You can disagree of course.

Perhaps it was their primary residence, they gifted it and then bought a new one?

Well that's another assumption yes.

Are the HMRC police?

Yes you found me out 🙄

hellithurt · 24/02/2022 14:49

@frgh

But it's totally irrelevant and I've no idea why you would ask?

As I said upthread I think any question around tax is relevant when the OP wants to remortgage. You can disagree of course.

Perhaps it was their primary residence, they gifted it and then bought a new one?

Well that's another assumption yes.

Are the HMRC police?

Yes you found me out 🙄

And the timescale question? Why's that relevant?
frgh · 24/02/2022 14:49

And it was none of your business and totally irrelevant

I think it's relevant in the context of the thread. No idea why it's triggered you!

Pluvia · 24/02/2022 14:49

@Cyclingforcake

Lots of people on Mumsnet are very mortgage adverse. But mortgages are often the cheapest loan you can get. I may be biased though as we’re about to extend our mortgage to do the same thing. And saving what we need will mean DC will have grown up and gone before we do the work we need.

Speak to a broker - a good one won’t charge you for advice - and see what you can borrow both with and without your DP involved.

No one here is mortgage averse. If the OP can take out a £55k mortgage at a reasonable rate and then save up enough money to pay it off in the next 3-4 years it's the obvious thing to do.

What people are pointing out is that as she is the only name on the deeds only she can raise a mortgage on the property. And that if she's only earning £13kpa and has three children, a mortgage company will find it difficult to lend her the money because of the affordability criteria they have to apply.

If you've been saving £13kpa for the last few years, OP, it may be easier to dip into your savings.

Have you had a quote for the work you want done? £55k for an extension, a new kitchen and remodelling sounds quite ambitious.

BaronessEllarawrosaurus · 24/02/2022 14:49

[quote frgh]@hellithurt what do you mean? As I said I assumed the parents were still alive & therefore still in need of a home so the gift was an additional property. [/quote]
The parents may have moved abroad and given her the former family home. The parents may have given her the cash to buy it. The parents may not have made any increase in value to pay cgt on. The parents may have paid 'their' cgt bill. None of that has anything to do with the thread. The op is not nor ever was responsible for any cgt

frgh · 24/02/2022 14:50

And the timescale question? Why's that relevant?

@hellithurt why don't you educate yourself

frgh · 24/02/2022 14:50

The op is not nor ever was responsible for any cgt

I never claimed she was though

hellithurt · 24/02/2022 14:50

@frgh

And it was none of your business and totally irrelevant

I think it's relevant in the context of the thread. No idea why it's triggered you!

Triggered GrinI love a highly emotive MN word! It's because you're giving ridiculous information,
hellithurt · 24/02/2022 14:51

@frgh

And the timescale question? Why's that relevant?

@hellithurt why don't you educate yourself

No please tell me, I'd love to educate myself!

Please tell me the reason why timescale is relevant?

frgh · 24/02/2022 14:51

@hellithurt what ridiculous or wrong information have I given?