Structure your property business to protect your legacy and always refinance on Interest only Mortgage

Structure your property business to protect your legacy and always refinance on Interest only Mortgage

17:01 PM, 20th June 2022, About A week ago 10

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Interest Only Mortgages are great for property investors, but what happens when you’re simply too old to remortgage.

In this episode of The Property Tax Show, I’m joined once again by Alex Norian, the tax specialist, from Property 118 to discuss how you can structure your property business to protect your legacy while continuing to refinance on Interest Only mortgages forever.

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Comments

Mark Alexander - Founder of Property118 View Profile

17:15 PM, 20th June 2022, About A week ago

Interesting discussion!

It’s also worth bearing in mind that there are lenders out there lending to Limited Companies needing less than 50% LTV without Directors Personal Guarantees. Therefore, it makes sense to aim to be below 50% LTV by that time. Also, there are lenders who will lend on 30 year terms when a Director is under 75 years of age, so technically they could be 105 years old before they run into this problem or need to be below 50% LTV if they get their planning right.

Another strategy is to hand Directorships over to the next generation prior to death, whilst retaining the controlling shares in the company.

A final point is that there are several lenders that will lend to larger property companies on terms they do not publish or add to the sourcing systems used by High Street mortgage brokers. We come across these regularly when dealing with Clients who engage a Broker who is an established NACFB Member

Mick Roberts

8:18 AM, 21st June 2022, About A week ago

I've not watched all video.
But I have to say I disagree with interest only mortgages forever. I get the Inheritance Tax & tax side of it, but u always better if u owe less as u get older.
None of us know what the future holds & the imbecile Govt & Council constantly retrospectively changing things. Notwithstanding if some lenders do stop lending to the individual or company for whatever reason.

And I'd say at age 50 60 70 whatever, it's always best to have zero debts, zero borrowing, zero mortgages than having £1 million £2 million debt etc.

Who knows where interest rates will go.
The moron lenders who make mistakes stressing u out as u get older. I've had bailiffs on me twice from Barclays Woolwich mortgages cause I overpay more than 3 times. Their system doesn't recognise the payment. I could tell many a stories with different lenders that would give u heart attack when older.

Mark Alexander - Founder of Property118 View Profile

9:06 AM, 21st June 2022, About A week ago

Reply to the comment left by Mick Roberts at 21/06/2022 - 08:18
Hi Mick

I see no reason to abandon the strategy that got you to where you are today.

Please see below …

https://www.property118.com/the-roots-of-my-property-investment-strategy/

Mark Alexander - Founder of Property118 View Profile

9:26 AM, 21st June 2022, About A week ago

Reply to the comment left by Mick Roberts at 21/06/2022 - 08:18
PS - one of the best reasons to continue growing your business, aside from building a legacy, is to have enough money to pay good people to create systems to do all the things that cause you stress. This also helps the economy and as well as having the satisfaction of knowing you provide people with decent homes you will also have the satisfaction of knowing that you can help people to build meaningful careers.

Mick Roberts

10:38 AM, 21st June 2022, About A week ago

Reply to the comment left by Mark Alexander - Founder of Property118 at 21/06/2022 - 09:06
Yes I've read your good article before & now.

And valid points both side.
I'll counter u & say what if you've paid off your mortgages AND got cash ready too. Ha ha we could go on forever.

Your second reply, yes another good point. My problem in Nottingham though with Selective Licensing & as u know, all the latest retrospective punitive tenant hurting rules, it's ultimately the Landlord that's responsible & goes to prison at 75 years old if tenant takes battery out smoke alarm.

I think everyone should overpay a touch each month. My notes on this below.

It's just nice to have no debt.
No mortgages.
No imbecile lender to deal with.
Each to their own & manageable debt is good & needed to start with.
But I have many mates who haven't overpaid & still owe the same they did years ago. However us that's overpaid are now seeing the fruit of them labours.

I think everyone should get in regular pattern of overpaying each month, on top of regular payment. While interest rates are low and u will take years off your mortgage.
Set an amount to suit u, too much and u may be skint. Too little and u may regret it if interest rates rise in years to come.
I think Drew said this too-Great to see the balance reducing when u get your yearly statement. And next year u will have even less interest to pay as your balance will now be lower. And subsequently, your overpayments pay even more off the balance.
I only recommend not overpaying by a lot if u using your spare money to invest elsewhere.

Cause some people ain't gonna' know what's hit 'em if we get interest rates rising once their fixed rates end.
Whereas us that's been doing it years can remember high rates. Some more so than me as I am still young u know.
So much so that on several of mine, I kept the same mortgage payment (overpaying) what it was ie. £413 in 2007 & still pay £413 now when mortgage is £30pm & it will be paid off in 2 years just by overpaying. I see so many Landlords not do this.
Each to their own, but even if u only round it up £20, u will notice the benefit in a few years as your balance comes down, the monthly amount they require comes down, & u now overpaying by £30pm without u paying any extra. For more successful goal tips, please subscribe to my channel £9.99pm.

Mark Alexander - Founder of Property118 View Profile

11:16 AM, 21st June 2022, About A week ago

Reply to the comment left by Mick Roberts at 21/06/2022 - 10:38
I still disagree Mick.

My parents sacrificed a lot in their early lives to pay off the £2,700 mortgage they took out in 1971.

If they had paid interest only the house would still be worth £300,000 today and the mortgage balance would still be £2,700.

Alternatively, they could have used my strategy to release equity, scaled up and been billionaires by now.

You are a hybrid. You started off as a billionaire would and then flipped to my parents strategy. I know you’ve done well for yourself and if you’re happy with that I’m happy for you. The question though is are you really happy? Your comments suggest that you’re not, because you are sacrificing opportunities to outsource the things that make you unhappy by paying off debt.

I’ve seen many landlords who have lost their way, especially in recent years. They are now becoming resentful of an evolving system as a result of their own decisions.

Mick Roberts

18:01 PM, 21st June 2022, About A week ago

Reply to the comment left by Mark Alexander - Founder of Property118 at 21/06/2022 - 11:16
U can disagree Mark,

And cause u in the sunny place & I'm in the well sunny place today, we'll discuss it over dinner one day in a hot place.

I'll email u some of my recent shenanigans with Barclays. I may be more biased against Lenders than others. Or maybe cause I'm smart with mortgage numbers, I spot when lenders make mistakes. I've seen many Landlords miss these mistakes.

Ha ha, now u going off track. Am I happy? I could say I was happier when I was 21 & had no cares. But am I happy now-Yes. Content yes. Could I be happier yes-If I was driving a F1 car for a living.
I do like a moan at the authorities though. But don't confuse that with unhappiness.

I've always overpaid by the way & I'm not saying it works for everyone, but I still say at age 70 better to have no debts than some debt. I can recall u telling me George Osborne shafted us all Maybe having no interest to pay could be the right way cause we couldn't see this coming.

Now we shun't discuss this on public wall, but what opportunities am I sacrificing? I go abroad about 7 times a year which is what I want-I like a gap inbetween. I've got the house, cars etc. Saying that, u got me now, as it's 1752 UK time & I'm just finishing in the office. Now that is bad at my age after so many years. While missus & kid sunbathing in the pool. They live better than me.
Apart from I'd be better off if I sold all the houses now, but I do have morals & conscience to the good tenants-Although Yes I know they'd crap on me if they could leave tomorrow.

You'll had to teach me about outsourcing one day, but maybe I like to be in control. I have about 8 with Letting Agent, but some of the individual staff who come & go are useless.

I believe I'm only resentful of new Council & Govt rules which shaft us & tenants when everything was running smooth. But happy to listen to u Mark, u wise & know your bit.

Hey, I've still got mortgages, so maybe I am doing it your way.
I did engineering when I was 16 & I said to the boss But it's good to have low rate mortgages in't it as he was telling me he'd paid off his own house. He said But it's MINE. I owe no one. They can't take it off me. No mortgage payments. And it worked for him. I've always remembered that.

I think it also depends on what u want, I always thought I wanted helicopters jets all sorts. But I've found me way now. Yes I could still get all that, but at what cost in time? I don't need to earn any more, In fact I'm at todays rates probably gonna' be leaving several million each to RSPCA, PDSA, Cat protection League. But who knows what the future holds, we just do our best to put ourselves in the best position should any unexpected obstacles come our way.

Mark Alexander - Founder of Property118 View Profile

18:16 PM, 21st June 2022, About A week ago

Reply to the comment left by Mick Roberts at 21/06/2022 - 18:01
I will take you up on that dinner one of these days Mick.

Meanwhile, please don’t forget to add Property118 to that list of good causes to leave your millions to

paul thomason View Profile

7:42 AM, 25th June 2022, About 6 days ago

Reply to the comment left by Mick Roberts at 21/06/2022 - 08:18
You just need to go to the specialist lenders which there are many .

Mick Roberts

7:49 AM, 25th June 2022, About 6 days ago

Reply to the comment left by paul thomason at 25/06/2022 - 07:42
Is there then a more expensive price for this? I wun't like to be paying 7% interest rate at age 75.

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