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Original poster

Husband wants to remortgage our house

32 replies

Bluedolphin1971 · 16/02/2016 16:37

DH has always said he would like to own property that he can let out, then sell when we retire. He is looking into this more seriously now but I'm really not sure about it.

We have a mortgage on our own home, it's only for approx £36000 but we have about £220000 worth of equity. We only have about 5 years left on our current mortgage.

I've told husband we should wait approx one year because he works in the oil industry as as we all know that is a dodgy area at the moment. His work is very quiet and understandably I'm concerned. I only earn about £900 per month and we have children.

He keep saying we need to Do this now (he is 47 and I'm 44). I Have asked him to wait about a year and see how his work is but he's not happy. I feel I'm going to be bullied into this because if he doesn't get his own way he will be like a bloody man child and throw a right strop which I can't be bothered with.

He doesn't worry about his work, his attitude has always been I will get another job, but I'm losing sleep over this, and although he knows this he isn't bothering.

Is it me being unreasonable and this is actually a very good idea or is it him being unreasonable. I thought it was perfectly reasonable asking him to wait a year.

OP posts:
zikreetdreaming · 16/02/2016 19:54

YANBU. Lots of people in oil and gas have always assumed another job will come along and there are a lot of people in trouble at the moment. Waiting a year is sensible.

Where I am O&G salaries have been ridiculously overinflated and everyone's expecting the hiring to start again eventually but on less money.

Why the urgency now? Presumably you've had the opportunity for investments before this.

specialsubject · 16/02/2016 20:37

is he fully informed about landlord laws, costs, responsibilities, tax, actual returns etc etc?

LonnyVonnyWilsonFrickett · 16/02/2016 20:42

It's a terrible time to get into BTL. We have a BTL flat (an old property we couldn't sell due to over-supply of two bed flats in the area). We started renting it out and have done ok, in that it's always been let and we've made a small profit.

The new tax laws mean our profit will be wiped out from this year and indeed I think it's going to cost us actual cold hard cash when we do our tax return. We don't want to sell and make our tenant homeless, and I suppose in the back of our minds the plan is to take the pain now, then have a property to gift to DS when he's older (he has ASD so employment may not happen).

If we were to sell it, CGT would hammer us.

Honestly, there's this perception that having just one BTL is a way to print money - it's not. At its very best it's a modest long term investment. At its worst, it's a money pit. Don't do it.

hilbil21 · 16/02/2016 20:45

I've inherited a house and we now have now mortgage or rent so my OH would like to buy somewhere and rent it out as an investment. He is also in oil and gas working offshore in the North Sea and it's just far far too risky just now! Luckily he agrees with me lol xx

Bearbehind · 16/02/2016 20:58

I don't understand the 'let's wait a year' tact.

As others have said BTL isn't the golden egg many think it is.

The pending increased stamp duty and loss of tax relief make it even worse.

If you work together to seriously look into this then you'll likely get your way anyway but trying to fend it off for a year with no basis, other than job security, isn't going to convince him.

NNalreadyinuse · 16/02/2016 21:01

I wouldn't risk my house and security just so my husband wouldn't have a strop.
It's not just his decision to make. Both of you have to want this, in order to do it. I would say a categoric no.

Original poster
Bluedolphin1971 · 16/02/2016 21:05

Thank you for replying. He has a friend who rents out properties so he has been getting some information from him, but he's had his properties for a number of years. His friend (with the best of intentions) has said to go to him for advice.

Tonight he has said if I could tell him where I would like to live when we retire!!!!!!! He could buy some land a build a house!!!!! I can't even answer that. Ideally I would like to live near my children I understand they might move away or abroad, but the youngest is only 10 so that's not something I'm wanting to think about.

I just can't get him to see sense. Tonight he has spent his time at the computer looking at properties and land for sale.
I'm not even sure if he would be able to borrow against our house. He doesn't work offshore she works for an oil and gas company onshore so he doesn't earn an offshore salary.

I will just have to try and speak to him. Surely he must be able to come and go with me, he can't have it all his way.

OP posts:
Coldwatebay · 16/02/2016 21:10

I think he's missed the boat for btls. We have several we've owned for years, but with the changes in tax law certainly won't buy any more.

2boysnamedR · 16/02/2016 21:15

If he is earning above or close to the 40% tax limit then he will be paying 40% tax. If your going to be joint owners he will pay 40% on his half.

This is a new thing being phased in over the next few years and it's making it less attractive to get a btl mortgage. It's also very hard to geta 25 year term if it takes you past 65. Banks don't care if it's past realistic retirement age nowadays or if the rent pays the mortgage. It's very risk adverse market right now

2boysnamedR · 16/02/2016 21:18

There was a calculator I found will dig it out and post it - shows profit after tax - very depressing if your a higher earner with a mortgage

LeaLeander · 16/02/2016 21:23

Sounds like that 220,000 in equity is burning a hole in his pocket and he is dying to spend some of it on a get-rich scheme.

Can you books some time with a reputable financial advisor who might be able to talk sense into him?

Original poster
Bluedolphin1971 · 16/02/2016 21:34

See his friend didn't take out a buy to let mortgage he took the equity out on his house, and bought another house cash. I haven't a clue what he told the mortgage company what he needed the cash for because I can't imagine th mortgage company allowed him to use th cash to buy another property!

Last year he was in the 40% tax band, but this year he won't be as he hasn't earned enough money.

I just want a simple life, I don't want much I would be quite happy to sell our home when the children move and buy somewhere smaller and live off our pensions, but that's not enough for him. Once our mortgage is paid we will have money every month that he can throw into an ISA or whatever, but he says that won't be enough.

OP posts:
Bearbehind · 16/02/2016 21:38

Would be interesting to find out if this 'friend' declares this income to HMRC Hmm

If he owns he's rental properties outright then the new rules won't affect him as he should have being paying tax on the full income anyway but, if he has a big mortgage on his main property, I suspect he hasn't paid tax on the rental income- if you were going to do so you'd have previously mortgaged the rentals not the main property.

2boysnamedR · 16/02/2016 21:45

He really needs to see a good FA. You would be paying tax on your profits, tax on your mortagage for your house. Possibly agent fees, there are no end of new checks / laws to comply with as a land lord. It doesn't print money. It is good for long term step on the property ladder type thing. If the market is kind long term it's worth doing. But it comes with cost.

Plus tenants come with a host of issues. You need to expect some hassle or pay a agent

LonnyVonnyWilsonFrickett · 16/02/2016 22:07

plus tenants come with a lot of hassle which presumably you, OP, would be dealing with day to day when DH is offshore...

Original poster
Bluedolphin1971 · 16/02/2016 22:18

Yes I probably would be left to deal with it. Something I'm not looking forward to. I don't imagine his friend has a large mortgage on any of the properties he owns, to be honest is friend is very money savvy, but I have to say I'm not sure if he declares his rental income to HMRC. That is something I'm not willing to do, you just don't mess with the tax man, and I'm not prepared to have a criminal record because of that.

OP posts:
zikreetdreaming · 17/02/2016 08:13

I'm actually considering buy another BTL this year but it's because I'm overseas and I'm looking for property in the UK long term. Hence I'm not looking to turn a profit now and obviously know I'm going to take a big CGT hit on sale (but don't really have another option) except not to buy.

My current house just about turns a profit (after repayment mortgage costs) but the tenants are paying my mortgage so I'll live with that. Once my personal allowance goes, I'll be paying tax on my nominal profit and will be having to fund the property (but as I say, there's a mortgage being paid off so effectively I'm buying equity and maybe one day the value will rise (bought in 2006!)).

The thing is o&g has been a secure industry for so long that people working in that industry often just can't conceive that they might ever have an issue getting a job. The mindset often hasn't adjusted to the situation everyone else went through in 2009. For so many years there has always been another job available when one finishes but that just isn't guaranteed now.

OP, I'm not commenting on whether BTL is a good investment, but I would strongly recommend not putting your current house at risk in the current o&g market. That's why I'm saying wait a year.

Salene · 17/02/2016 08:25

If your husband loses his job anytime soon soon in O&G he can forget getting another one this year. There is no jobs , he needs to be prepared to be out of work for a year or 2 at least

If he goes ahead and does this, during times of no tenants can he comfortably meet the morgage payments on the property as don't assume it will always be let

If you are based in Aberdeen the rental market has collapsed and is flooded with properties so the chances of long periods with no tenants is high.

Personal I think it's a huge mistake to get into any financial situations right now with the way the oil industry is. Every penny should be being saved for when the P45 arrives as right now no one is safe.

We wouldn't even buy a 2nd had car right now let alone a property. This oil crisis could well go on into 2018 with thousands more jobs still to go.

Let your husband strop but stand your ground or his foolish ways could cripple you.

Mondrian · 17/02/2016 08:41

I think he has missed the BTL boat by a few years. I am in a position to purchase a second property with the view of letting it but given current economic worries, recent cooling of the market & forecasted interest rate hikes, I am going to play the waiting game as I think prices could be in for a drop in 2017/8. Maybe a good idea to show him below article ...

uk.finance.yahoo.com/news/mapped-where-worst-hit-interest-074540352.html

Original poster
Bluedolphin1971 · 17/02/2016 09:15

Thanks everyone. He isn't bothered about making a profit now, he just seems to think the way to make money is to buy a property, let it out, that will cover the mortgage payments then in 20 years time when we are due to retire sell it, then Sell our current home buy something smaller and we will still have money left plus pensions. The way he's talking isn't to make money now.

Although he works in the oil industry, he doesn't work off shore all the time, his company is based onshore and he goes offshore whenever needed (usually a couple of times a year). If he did lose his job he isn't just restricted to working in the oil industry he can work elsewhere because of his trade.

I can kind of see where he is coming from, but I just don't think it's the right time and he can't see this. I'm worried incase he just goes ahead and does this without me being happy with it. I suffer from anxiety and I just think he isn't thinking about my wellbeing. He keeps telling me I wil end up worrying myself to the grave, I think this will make me get there faster.

OP posts:
Original poster
Bluedolphin1971 · 17/02/2016 09:20

My husband has told me in the past that I hold him back. He wanted to move to Canada a few years ago, and I wouldn't go. He wanted to buy properties in the past I said no, he wanted solar panels I said no.

I'm just not a risk taking person and my one worry which I have all the time is losing my children's home. I look forward to my mortgage to being paid off and I can say it's finally ours, it's safe and no one can take if away from us.

Is that a bad feeling to have & want?

OP posts:
ABetaDad1 · 17/02/2016 09:29

You would be better paying of your own mortgage rather than taking on a new debt on it Especially if DH is in the Oil industry.

There is massive glut of oil at the moment and without a major disruption in supply it is unlikely prices will bounce back any time soon. I used to work in the oil industry and still follow the market closely. No one can predict where oil prices will go. A major war in the Middle East and prices will spike upwards very sharply but the reality is without that kind of major disruption the supply glut will take several years to ease.

If he really wants to do BTL then by all means get a new property, get a BTL mortgage on it and rent it out but do the numbers on that basis - without remortgaging.

However, the Stamp Duty tax rules are due to change on 1 April this year and also the tax benefits of BTL have dramatically reduced in recent years. The BTL ship has really sailed.

To be perfectly frank, I think in his position he is mad to take on this liability when his job is under threat. You should be pouring all his earnings into getting that mortgage down so you are more secure.

You already do own property. Its your home.

Fluffycloudland77 · 17/02/2016 14:09

Bloody hell I'd say no. There is nothing wrong with wanting to pay down a mortgage and own the house outright.

scarlets · 17/02/2016 16:30

I think that the btl ship has sailed, as others have said. An exception might be student accommodation in a city where demand outstrips supply, if you can be bothered with the hassle.

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