Hello,
I have been contracting for about 5 years, I am now planning to buy my first house.
I am using my personal savings to pay 20% deposit. however I am considering closing down my ltd company as I am going on Maternity leave soon. I am planning to take about 8-9 months maternity break and then look for another contract role via umbrella company for sometime or move to permanent role, depending on how situation is post my break.
I have spoken to my accountant and he thinks that considering I am going to take a break, closing down the company and claiming ER is better option.
I am planning on putting about 50% of the cash which I will get from LTD company to pay off my mortgage.
I have offer accepted on one property just few days back.
ER process takes about 2 months, and I might not have cash by the time I progress on buying this property.
I am considering to make 10% over payment on the mortgage once the ER process is complete and I have got cash in my personal account from company bank account.
My question is - Option 1. Is it better to wait for the ER process to complete before buying the property and use the cash against deposit (bring down LTV to about 73%, there by getting little better interest rate during first 2 year fixed period)
or Option 2 :- continue with the buying process, once ER process is complete, use the fund to make 10% early payments.. there by reducing monthly repayments (I won't be able to reduce the term during initial fixed period )
Can you please advise would option 1 be better or option 2?
Thanks
I have been contracting for about 5 years, I am now planning to buy my first house.
I am using my personal savings to pay 20% deposit. however I am considering closing down my ltd company as I am going on Maternity leave soon. I am planning to take about 8-9 months maternity break and then look for another contract role via umbrella company for sometime or move to permanent role, depending on how situation is post my break.
I have spoken to my accountant and he thinks that considering I am going to take a break, closing down the company and claiming ER is better option.
I am planning on putting about 50% of the cash which I will get from LTD company to pay off my mortgage.
I have offer accepted on one property just few days back.
ER process takes about 2 months, and I might not have cash by the time I progress on buying this property.
I am considering to make 10% over payment on the mortgage once the ER process is complete and I have got cash in my personal account from company bank account.
My question is - Option 1. Is it better to wait for the ER process to complete before buying the property and use the cash against deposit (bring down LTV to about 73%, there by getting little better interest rate during first 2 year fixed period)
or Option 2 :- continue with the buying process, once ER process is complete, use the fund to make 10% early payments.. there by reducing monthly repayments (I won't be able to reduce the term during initial fixed period )
Can you please advise would option 1 be better or option 2?
Thanks
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