Brendan Burgess
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But that is not getting it out? That is making it worse. You will have to sell the BTL , pay CGT in the company. and then pay 55% on the net amount taken out.
Private Residental Mortgage bank who will take into account retained profits and rental income
- Thread starter DublinRoaming
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But that is not getting it out? That is making it worse. You will have to sell the BTL , pay CGT in the company. and then pay 55% on the net amount taken out.
Brendan Burgess
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T McGibney
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I'm totally lost. Is your company salary 70k or 35K?
Me too. The information seems to keep changing or being added to in dribs and drabs...
DublinRoaming
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My P60 is 70k
made up from 35k company income
PLUS
35k rental income
TOTAL 70k
ltd company takes in 100k a year out of this i pay myself 35k ..
I could increase my drawings from the company to 90k if this would help my mortgage application but ideally i would want a bank to look at retained profits and see why i am only drawing 35k not 90k odd
so then my income would be 90k +35k rental income but before i do this and cost myself a fortune in tax
my original question is Are there any banks that take into account retained profits and rental income as part of a affordability calculation
nothing has changed or been added to or dribs and drabs pls take some time to carefully read what i wrote
T McGibney
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That's not your P60. The term (obsolete in Ireland since 2019, still in vogue in the UK) refers exclusively to salary/wage income taxed under the PAYE system.
I don't wish to be harsh or unkind but your imprecision is frustrating for those of us who are trying to help you here and may also be likewise for the bank officials assessing you for a mortgage.
I return to my suggestion above that your situation seems tailormade for a mortgage broker.
For what it's worth from another thread:
As far as I know even if a lender factors in rental income they won't factor in 100% of it.
Please take some time to carefully read my earlier posts trying to clarify confusing/conflicting information that you posted.
T McGibney
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Nobody here is under any obligation to help you and a little gratitude wouldn't go amiss.
Yes, see my previous post.
How many lenders and/or brokers have you approached?
But, as others have already suggested, alternatives such as going for a different property, selling your rental property, loan/deferral arrangement from siblings, etc. might be more of a runner than funding this purchase (and renovations) via a mortgage.
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The €32k is being taken into account.
The answer is still no
Brendan Burgess
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I hate answering a question which really should not be asked, but here goes.
I think that some of the new lenders will give you a mortgage on your buy to let. ICS for example.
But as with Tommy's earlier suggestion, a broker would guide you better on this issue.
But take the cash out of the company anyway and this will reduce how much you need to borrow.
DublinRoaming
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this is the basis for my questions about retained profits
thanks for that i was wondering if i could reportage my BTL and go that way ill think about this more . .thank you
will do thanks
ICS and Nua money do
i give up
yes correct i am employee from my ltd company
i think the takeaway here that i should talk to a broker thanks all
Like others, I have found this thread a confusing read but the general conclusion that you need to go to a broker is correct. A good one will be able to paint your finances in the best possible way for a lender.
But beyond that, I think you need to change your attitude on tax. We all want to minimise the tax we pay but not to the point where it limits what you want to achieve personally/financially.
For the jointly owned property, who is your co-owner and have they the means to clear the mortgage? If they do, you should just take the hit and take the €45-50k net from your company. As you would no longer be jointly and severely liable, it increases your personal borrowing capacity by €95k for a net cost to you of half that amount.
Is the house the entirety of your father's estate? Is there cash or other assets to be distributed that can be used to reduce the €400k you need to pay off your siblings
You obviously need to increase your salary from your company but once everything settles you can revert back to your current practice. What currently happens to the €65k? Are you funding a pension with this?
But beyond that, I think you need to change your attitude on tax. We all want to minimise the tax we pay but not to the point where it limits what you want to achieve personally/financially.
For the jointly owned property, who is your co-owner and have they the means to clear the mortgage? If they do, you should just take the hit and take the €45-50k net from your company. As you would no longer be jointly and severely liable, it increases your personal borrowing capacity by €95k for a net cost to you of half that amount.
Is the house the entirety of your father's estate? Is there cash or other assets to be distributed that can be used to reduce the €400k you need to pay off your siblings
You obviously need to increase your salary from your company but once everything settles you can revert back to your current practice. What currently happens to the €65k? Are you funding a pension with this?
Just to clarify, is either of your current rental properties owned through your company?
DublinRoaming
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possibly but there is 4300 a month arriving into my current account .. (2300 salary from company and 2000 from rent )
i find this well more than i need to live on..
no they will not clear the mortgage
house is main asset .. cash divided up with my siblings and grandkids
yes i increase salary btw its not really 65k there is paye,tax , corporation tax, business expenses(minimal) prob round 50k it just sitting in current account i was thinking about buying another BTL in a few years if it keeps on growing
No
What €65K?
This figure was never mentioned before the above?
Again a lack of clarity in the thread that is confusing.
What €65K?
This figure was never mentioned before the above?
Again a lack of clarity in the thread that is confusing.
Edit: oh, is this it?
But then how is there "PAYE, tax" on that if it's retained in the company? And how/why does €65K become €50K? And if it's €50K then mention €65K at all....?
As I say, very confusing...
What €65K?
This figure was never mentioned before the above?
Again a lack of clarity in the thread that is confusing.
Edit: oh, is this it?
But then how is there "PAYE, tax" on that if it's retained in the company? And how/why does €65K become €50K? And if it's €50K then why mention €65K at all....?
As I say, very confusing. And I'm not the only one:
Being blunt, it is very hard to follow your logic. You want the banks to bend/break all lending rules but you don't want to change anything you are doing.
Including renovations, you want to borrow €330k and you currently have a €95k mortgage. Going by CB lending limits, it's clear that you need an income of >€120k to achieve this.
Of your €4.3k, you have a mortgage of €1350 (jointly and severally liable) and assuming a 25 year term, you want to take on another mortgage of €1650. That only leaves you with €1300 to live on and maintain a €600k property. Even after lending limits, it should be clear from an affordability perspective that your €70k income is not sufficient
The rules around lending are pretty clear and have been that way for the last 15 years. You need to accept that and play by the rules.
If you really want to own this property then you should:
- Take the cash out of your company
- Increase your salary as much as possible
- Forget about renovations
- Forget about buying another rental through your company
- Speak to a broker asap
- Speak to your own accountant so your numbers clear
Including renovations, you want to borrow €330k and you currently have a €95k mortgage. Going by CB lending limits, it's clear that you need an income of >€120k to achieve this.
That is great for you that you live comfortably within your means but it is not what the bank is interested in.
Of your €4.3k, you have a mortgage of €1350 (jointly and severally liable) and assuming a 25 year term, you want to take on another mortgage of €1650. That only leaves you with €1300 to live on and maintain a €600k property. Even after lending limits, it should be clear from an affordability perspective that your €70k income is not sufficient
You've answered your own question. The bank has the cop on to realise that as long as you keep it in the company then you can do anything you want with it that is not in their interest and adds to their risk. Why would they do this?
The rules around lending are pretty clear and have been that way for the last 15 years. You need to accept that and play by the rules.
If you really want to own this property then you should:
- Take the cash out of your company
- Increase your salary as much as possible
- Forget about renovations
- Forget about buying another rental through your company
- Speak to a broker asap
- Speak to your own accountant so your numbers clear