Showing proof of shares during mortgage process

bittered

bittered

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I have about €80k in shares on Degiro. The bank has asked to see evidence of this when assessing my mortgage application. How do I show them evidence of this? I could take a screenshot of my portfolio page but that doesn't seem likely to be very convincing.
 
I did a screen shot and excel download of current holdings. This was sufficient but in my case I think it was more about showing were the same amount of cash was going each month rather than the value of the investment
 
TheBig40 said:
I did a screen shot and excel download of current holdings. This was sufficient but in my case I think it was more about showing were the same amount of cash was going each month rather than the value of the investment
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Thanks!
 
Why are you not selling the shares and borrowing less?

By doing what you are doing, you are effectively borrowing to buy shares which is not a good idea.

The only good reason for doing this is if you are taking out a cash-back mortgage and you intend to sell the shares immediately after drawing down the mortgage and paying down the mortgage.

Brendan
 
By doing what you are doing, you are effectively borrowing to buy shares which is not a good idea.
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Not really, most of that 80k is subject to capital gains at 33%. Would prefer to continue taking the tax-free gains out every year and perhaps a lump sum if the rumoured temporary 20% CGT rate is implemented.

My returns from shares over the past 5 years have massively outperformed interest that I would pay on a mortgage. No guarantee that it will continue, but I'm happy with the risk as my mortgage repayments will be comfortable for me and much less than the rent I'm paying now. I have already cashed out 15k of the gains.
 
Hi bittered.

Say you had a house worth €400k and a mortgage of €200k.

Would you increase your mortgage by €80k to buy shares?

So by not paying down the mortgage with your shares, you are effectively borrowing to invest in shares.

If you want to avail of the annual CGT exemption, you could keep €12k in shares.

If you want to punt on CGT being lower, you could keep some more in shares.

But you should sell the bulk of your shares.

Brendan
 
If you click "Export" on your Portfolio screen and choose PDF it will produce an offical looking statement. Might be better than a screenshot.
 
Brendan Burgess said:
€1,270 a year for 10 years
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CGT is only payable on the gains. So I can take more than that out tax-free every year. Also, I transfer half to my partner and use her credits too, so that's €2,540 of tax-free gains every year. Roughly half is gains for me right now. Taking that into account, I might be able to take out about €5k/year tax-free.
 
bittered said:
I have about €80k in shares on Degiro. The bank has asked to see evidence of this when assessing my mortgage application. How do I show them evidence of this? I could take a screenshot of my portfolio page but that doesn't seem likely to be very convincing.
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Would it make a difference to your repayment capacity if you didn't have the share account? You have to declare all other credit anyway so that would include portfolio margin. If you don't have that then I'm not sure what's to gain by declaring.

It's an unnecessary information grab, IMO. I was asked for the same and refused.
 
bittered said:
most of that 80k is subject to capital gains at 33%
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bittered said:
I might be able to take out about €5k/year tax-free.
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OK, the wording of the first quote suggested that you had such investment returns over the last few years, that it was mostly capital gains.

If your gains are 50% , then the CGT hit will be 33% of €40k or €13k ( A reduction in CGT to 20% would reduce the bill to €8k)

So, keep two years of tax exemption - say €10k and sell the rest.

Brendan
 
Another reason for selling could be that this amount might bring your Loan to Value down to a level where the interest rate on your entire mortgage is cheaper.


Brendan
 
bittered said:
CGT is only payable on the gains. So I can take more than that out tax-free every year. Also, I transfer half to my partner and use her credits too, so that's €2,540 of tax-free gains every year. Roughly half is gains for me right now. Taking that into account, I might be able to take out about €5k/year tax-free.
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Curious about this. Degiro don't allow shared accounts and as far as I know you can't transfer shares (or cash) to an account in a different name. So how can you transfer half to your partner and use their CGT allowance? The gain has occurred on the sale which is before any transfer. So, technically, the gain is still yours no matter the fact you transfer something after.
What am I missing? Would like to know as if possible I would take advantage of partners CGT allowance.
 
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