Help to buy scheme and contracting

MrMoonX said:
I really hope someone like you gets bent over by HMRC for your massive tax dodging
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I see youb are falling for the spin that's meant to make you feel jealous and want others to pay more tax. He is likely to be paying every penny he lefally has to and not dodging tax.

No I am not a contractor.

I don't agree with the sentiment of anyone on so much mo ey asking for assistance from others to pay for his house, however. Indeed the whole help to buy scheme simply pushes up bouse prices for everyone.
 
Hades said:
Weren't the changes recently announced and they aren't anywhere near as bad as people were worried about (this time)?
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Nope. They thought something would be announced in the Autumn statement but wasn't, so the budget next year will be the big announce.

Have a look at the Contractor UK forum, they're not happy.
 
OP unless they have changed the HTB rules it doesn't have a £60k earnings cap. I bought somewhere this year using HTB and our earnings are well in excess of that. You should be fine, have another look at the different options.
 
What most contractors do is pay a salary of £12k a year and then take up to the high rate tax threshold as a dividend. Therefore the only income is £40k a year (salary is still £1k per month) whilst the company retains the remainder. The remainder is not your money.

This way of managing finances works, unless you want a mortgage as the bank will only see your real income as £12k.
 
There is more then one approach (equity loan, isa, guarantee) with the Help to buy. You have probably reviewed already but if you haven't then go here and check it out:

http://www.helptobuy.gov.uk/home

Following on from this Mortgage lending is now gauged on affordability and not just a straight forward X times salary multiple. The more your spending currently the lower your chances will be of getting a decent mortgage.

If you have any of the following then get rid of them in priority order:

Credit Cards / Store Cards
Personal Loans
HP/Car Finance

Things to consider in the months leading up to applying for a mortgage.
Reduce your luxuries - cut down to basics as all of your spending is reviewed
Reduce evenings out/takeaways
Cut out unnecessary subscriptions etc

Your monthly income will have a much greater effect on your ability to get a mortgage then your deposit, so you will also want to consider taking the tax hit and paying yourself more for the foreseeable.
 
Danger Phoenix said:
It's not dodgy... its all above board which is why they are cracking down on contractors. By cracking down I mean changing the rules :mad:
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Under IR35, most contractors should be paying themselves the market rate for their work as salary. Very few do though as the rule is hard to enforce (and hence why the rules are changing).
 
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the help to buy scheme is flawed in many ways, I refused to go with a HTB mortgage as a viable option for the house I'm buying at the moment, it's interest free for 5 years but after that....

It's like the old interest only mortgages, but done differently, basically allowing people to buy houses more expensive that they should/could normally afford and after a few years the payments will ramp up from the first 5 years payments.
 
Syla5 said:
There is more then one approach (equity loan, isa, guarantee) with the Help to buy. You have probably reviewed already but if you haven't then go here and check it out:

http://www.helptobuy.gov.uk/home

Following on from this Mortgage lending is now gauged on affordability and not just a straight forward X times salary multiple. The more your spending currently the lower your chances will be of getting a decent mortgage.

If you have any of the following then get rid of them in priority order:

Credit Cards / Store Cards
Personal Loans
HP/Car Finance

Things to consider in the months leading up to applying for a mortgage.
Reduce your luxuries - cut down to basics as all of your spending is reviewed
Reduce evenings out/takeaways
Cut out unnecessary subscriptions etc

Your monthly income will have a much greater effect on your ability to get a mortgage then your deposit, so you will also want to consider taking the tax hit and paying yourself more for the foreseeable.
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I will be applying for a mortgage around february/march time. I think i am generally good with my money however, i do spend deposit about £10 a week into my skybet account, i guess that will be frowned upon :/.
 
Bassmansam said:
I will be applying for a mortgage around february/march time. I think i am generally good with my money however, i do spend deposit about £10 a week into my skybet account, i guess that will be frowned upon :/.
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£10 per week is hardly breaking the bank, it wont be frowned upon, it will be classed as an expense (depending on how clinical your mortgage broker/advisor is). If you can hold off for the next few months then you wont have to class it as an expense when you come to mortgage application time.
 
The way to do the part buy scheme is to treat the house as a stepping stone to a real mortgage. Look to walk away with £30k-£50k for a real deposit on a real mortgage from it.

I am considering doing it myself but will be buying a house that i hope will appreciate significantly.
 
anything I don't mind said:
The way to do the part buy scheme is to treat the house as a stepping stone to a real mortgage. Look to walk away with £30k-£50k for a real deposit on a real mortgage from it.

I am considering doing it myself but will be buying a house that i hope will appreciate significantly.
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Shared ownership property isn't always that easy to sell on. If the price should fall then often that is taken out of the part you "own" before the housing association's share is affected.
 
Ace Modder said:
the help to buy scheme is flawed in many ways, I refused to go with a HTB mortgage as a viable option for the house I'm buying at the moment, it's interest free for 5 years but after that....

It's like the old interest only mortgages, but done differently, basically allowing people to buy houses more expensive that they should/could normally afford and after a few years the payments will ramp up from the first 5 years payments.
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It's only 20% of the total mortgage and after 5 years it's only about 1.75% of the "loan" you get charged (not 100% sure if % is correct), and as mentioned just use the scheme as a stepping stone for 5 years, ride the bubble and move on.
 
I didn't quite read the whole thread, but you'd better declare enough of your true income to ensure you get a big enough mortgage offer. £12k income isn't going to look good to the bank!

Regarding shared ownership, it's almost impossible to buy any of your property back. I'm currently buying help to buy and have accepted that we only own 80% of our property, and we will be leaving before we have to start paying interest on that. The government will make 20% of whatever we sell our house for, so no way am I going to pay extra on top of that!
 
Exactly. I'd only use help to buy on a place you'll leave within 6 years or so or where you are capable of paying off the 20% contribution within 5/6 years.
 
dirtychinchilla said:
I didn't quite read the whole thread, but you'd better declare enough of your true income to ensure you get a big enough mortgage offer. £12k income isn't going to look good to the bank!

Regarding shared ownership, it's almost impossible to buy any of your property back. I'm currently buying help to buy and have accepted that we only own 80% of our property, and we will be leaving before we have to start paying interest on that. The government will make 20% of whatever we sell our house for, so no way am I going to pay extra on top of that!
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I thought though the idea behind part buy was not ever own the house but to walk away within 2-3 years after buying with more money than you put down because the house has appreciated? Giving you a bit more deposit for a real mortgage. Obviously that depends on house appreciate but a lot to do with buying houses does.
 
Isn't shared ownership a better step for you Stoodles? Then just apply to buy more and more of the ownership of the property in due course?

We're saving for a deposit but it's taken years to get something worthwhile despite it being from 2 incomes :( It's just not easy.
 
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