Warchest never seems enough....

[Old Hack]

Help to Buy - yes that's the one I meant, wasn't sure about the name.

I may look into it again but I'm sure when I looked into it before it didn't seem like it would be of any benefit if you already have a decent deposit.

OTOH, if you can get it, I suppose it saves you 5 years worth of interest, even after accounting for any increase in value of the original loan.

Have the gov actually released any more information on it, as everything I could find before was a bit vague.

Take this anyway you want, but it's just an idea from someone who's going to be doing the same.

If you have, say, a 25/30% deposit, you only pay 5%, take the govs 20%, leaving you a 75% mortgage. It's an offset, or one you can overpay as much as you like. Once you're in the house, what's left of your deposit, say 20-25%, pile into your offset, or simply pay it off. You now have a 50-55% mortgage, one, as a contractor, you should be able to seriously knock down after 3-5 years. Once the government come running for their money, you get to pay it off at 1.75%. OR, they continue the scheme, which is how I think things will run out.

The other option, is if you have a 25% deposit, pay 5%, take the govs 20%, then put your remaining 20% into shares/gold/drugs/whatever you want and take a punt on that 20% making more money then 0% over the next 3-5 years.

It's too good an opportunity to give up as far as I am concerned. Split the deposit with your wife, get her to get her own mortgage, buy a flat, or small house and take not only the increase in value the house makes over 3-5 years, gamble the 20% in shares, etc.

There are so many ways you can do this, depending on your risk averseness.

Make sure you do it though

Help to Buy

[No2politics]

I view the retained profit in the company as my warchest. It's there to cover my regular quarterly dividend payments in the absence of work. Anything I've accumulated personally is just savings, which I budget for different things (e.g. rainy day funds, projects, long-term savings and investments etc.).

To build up a significant personal "warchest", I'd have to take more out of the business and pay higher rate tax on it, so there's not much point.

Exactly

[Coalman]

Take this anyway you want, but it's just an idea from someone who's going to be doing the same.

If you have, say, a 25/30% deposit, you only pay 5%, take the govs 20%, leaving you a 75% mortgage. It's an offset, or one you can overpay as much as you like. Once you're in the house, what's left of your deposit, say 20-25%, pile into your offset, or simply pay it off. You now have a 50-55% mortgage, one, as a contractor, you should be able to seriously knock down after 3-5 years. Once the government come running for their money, you get to pay it off at 1.75%. OR, they continue the scheme, which is how I think things will run out.

The other option, is if you have a 25% deposit, pay 5%, take the govs 20%, then put your remaining 20% into shares/gold/drugs/whatever you want and take a punt on that 20% making more money then 0% over the next 3-5 years.

It's too good an opportunity to give up as far as I am concerned. Split the deposit with your wife, get her to get her own mortgage, buy a flat, or small house and take not only the increase in value the house makes over 3-5 years, gamble the 20% in shares, etc.

There are so many ways you can do this, depending on your risk averseness.

Make sure you do it though

Help to Buy

OH what are doing about buy-to-let mortgages not being eligible?

[TheCyclingProgrammer]

No, I mean the Help to Buy scheme; every one is eligible, all you have to do is provide a min deposit of 5% and the gov provides 20% interest free for 5 years (could be 3). Everyone eligible. Currently only available on new builds, although will be on all homes from Jan 2014. My wife and I are buying flats with it next year.

You might want to look into this again. The Help to Buy equity loan scheme is NOT being extended to all homes in 2014.

There is a new mortgage guarantee scheme that starts in Jan but it's not the same thing. Details are also scarce.

I'm pretty sure neither schemes are eligible on second homes or BTL either.

[Old Hack]

OH what are doing about buy-to-let mortgages not being eligible?

Not telling them. We own our own house outright, wifey arranged a mortgage with Santander, me with Halifax.

[Old Hack]

You might want to look into this again. The Help to Buy equity loan scheme is NOT being extended to all homes in 2014.

There is a new mortgage guarantee scheme that starts in Jan but it's not the same thing. Details are also scarce.

I'm pretty sure neither schemes are eligible on second homes or BTL either.

Tis true, but it is the same thing. Speak to your bank, they know all about it.

You can use it to move house, or buy a house. Our house is Mortgage free, and in the girls names. These will be 'our' homes, per se.

Trust me, we've looked into it.

[Project Monkey]

I am indeed just for discussional purposes. Thing is though. We can only take out a certain amount before paying a lot in tax. There is no point taking more out for your warchest because of the tax and I don't know how others do it but I can't live AND save hard for a warchest in what I pay myself a year. The rest I can't take out mounts up in the business so warchest builds it's self. I guess those who's lifestyle allows them to save then fair enough but again that to me are savings. Warchest is the spare money in the business I can't get out. Horses for courses that one I guess.



Don't understand this. I access my warchest in the business when there is no contract money coming in so I can continue to pay myself the same amount when I am out of work. That is the whole point of the warchest isn't it? Uninterrupted income during hard times. Am I missing something here cause your statement doesn't make sense to me.

I keep company pay and savings separate. Warchest is there to allow the company to continue to remunerate me while I am out of work. Personal savings are personal savings for me.

Interesting to see how everyone else does it though.

I keep a sufficient warchest (as you've defined it) in the business, and take the rest out as divi's. If this take me over the upper tax threshold, then I pay the addition tax. I decide how big the warchest needs to be and done let it drop below that number. CT, PAYE/NI, VAT and any other liabilities stay in the business also (of course).

I don't see the point of letting a warchest grow and grow unnecessarily, take the money out and use it - invest, spend, save, burn, whatever.

[northernladuk]

I don't see the point of letting a warchest grow and grow unnecessarily, take the money out and use it - invest, spend, save, burn, whatever.

Yeah I can see that. Might as well save it in the most tax efficient way as possible though I would have thought. Need to look in to options what to do now it is approaching a happy state as you say though.

[Ticktock]

Tis true, but it is the same thing. Speak to your bank, they know all about it.

You can use it to move house, or buy a house. Our house is Mortgage free, and in the girls names. These will be 'our' homes, per se.

Trust me, we've looked into it.

PC was castigated for daring to claim JSA (what is it, £75 per week now?) after paying NI and taxes, yet no-one seems to have an issue with OH abusing this scheme for potentially thousands?

In one way, I don't blame you - doing what you can to look after your family, following the rules as they are written. On the other hand, I'd argue that this is going against the spirit of those rules and harming the very people the scheme is intended to help.

Did you also sign up for each of the latest tax avoidance schemes as they came out? At that point they were legal (according to the letter of the law) and would have helped your family also.

[Old Greg]

PC was castigated for daring to claim JSA (what is it, £75 per week now?) after paying NI and taxes, yet no-one seems to have an issue with OH abusing this scheme for potentially thousands?

In one way, I don't blame you - doing what you can to look after your family, following the rules as they are written. On the other hand, I'd argue that this is going against the spirit of those rules and harming the very people the scheme is intended to help.

Did you also sign up for each of the latest tax avoidance schemes as they came out? At that point they were legal (according to the letter of the law) and would have helped your family also.

I think PC was principally castigated because he's a ******* moron who shares every detail of his dreary little life with us, hiding in the professional forums so he doesn't get called a ******* moron.