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Taking out a mortgage and purchasing a buy-to-let property through a limited/LTD company or SPV (Special Purpose Vehicle) can be more tax-efficient than doing so in your personal name as a private landlord.
You can find more information on the other advantages of purchasing a buy-to-let through a limited company in our guide.
Or, keep reading to compare buy-to-let mortgage rates for limited companies and find out how John Charcol can help you.
Use our free best buy tool to view the best limited company buy-to-let mortgage rates currently on the market.
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We work around your schedule to help you arrange a mortgage that suits your circumstances, no matter how complex.
When you phone us, you can either arrange a phone appointment with your adviser or a face-to-face meeting – whatever suits you. Your adviser will ask you some questions and, once they have all the information they need, they’ll go away and find you the buy-to-let mortgage for your circumstances and future needs. They’ll also arrange a follow up call to present you with what they’ve found. It may require more than one conversation to gather all the right information, depending on where you are in your property search.
Once you’re happy with their recommendation, you adviser will go about securing your DIP (Decision in Principle) - which is basically a promise from the lender that they’ll loan you money on the condition that the information you’ve provided is correct and subject to a valuation of the property.
After you’ve secured a DIP (Decision in Principle), you’ll be in a great position to make an offer on a property or move forward with refinancing and possibly changing ownership from private landlord to limited company.
Following the acceptance of your offer, we’ll send you some information which explains all the documents we need to submit to the lender. You’ll be assigned a client relationship manager who’ll check and submit certified copies of your documents; they’ll liaise with both you and the lender. Your adviser will then submit the fully packaged mortgage application.
The lender will underwrite your application; this basically means they’ll verify the information you’ve provided and review all your documents for themselves. They’ll also instruct a valuation for their purposes on the property.
If the lender is happy with everything they’ve found, they’ll send you a mortgage offer. They’ll also send us a copy.
After you’ve accepted your mortgage offer, you’ll go through the legal part of the process, known as conveyancing. This is where the solicitors/conveyancers draw up contracts and organise the actual, legal purchase of the property/refinancing. If buying, you’ll also need to arrange buildings insurance at this stage, making sure it’s in place from exchange.
Once everything is in place, your conveyancer/solicitor will exchange contracts with the seller’s conveyancer/solicitor. It’s at this point that you put down your deposit and are legally bound to buy the property. You’ll lose your deposit if you pull out after exchange. The purchase completes when money is transferred on an agreed-upon date. As soon as you have a date for completion you’ll know when the property can take tenants, therefore you can start speaking to a letting agent. If you’re refinancing, then your conveyancer/solicitor will set a date to draw down the funds and pay off any existing lender(s) once the mortgage offer’s released.
We can refer you to a solicitor experienced in conveyancing for limited company buy-to-let mortgages.
We can arrange buildings and contents insurance for properties owned by limited companies through our partnership with Legal and General.
You’ll need a specialist mortgage broker like John Charcol to apply for a limited company buy-to-let mortgage. Not only do we understand what criteria you need to meet for your mortgage, but most limited company buy-to-let mortgage lenders won’t accept your application unless you use an intermediary.
For help setting up a limited company for buy-to-let purchases, consult a tax adviser/accountant. They’ll be able to make sure everything is set up properly.
You may want to approach a tax adviser/accountant before speaking to a mortgage adviser. That way, your limited company can be set up and you’ll be ready to start the mortgage application process when you first speak to your mortgage adviser.
Nonetheless, if you want some more information limited company buy-to-let mortgages before setting up your limited company, then give us call on 0344 346 3672 and we’ll answer your questions.
To take out a buy-to-let mortgage through a limited company, your limited company needs to have been set up with the purpose of buying/selling/managing property.
If you don’t already have a suitable limited company, you can set up an SPV. An SPV is a company you set up to buy/sell/manage property, specifically so that you can get a buy-to-let limited company mortgage.
It’s important you speak to an accountant as they can help make sure that your SPV is set up with certain SIC codes and definitions in mind.
See our guide for how to set up a limited company for buy-to-let purchases and for information about SIC codes.
You can buy a house through a limited company if you’re using company funds to buy the property outright, but very few people ever do this as there are certain tax implications.
However, you can’t take out a mortgage for a main residence through a limited company like you can for a buy-to-let property.
You can take out a buy-to-let mortgage through a limited company. The buy-to-let property you purchase with the mortgage will be owned by the limited company. Many people choose to do this - rather than take out a buy-to-let mortgage and purchase a property as a private landlord - because it can be much more tax-efficient and better for Inheritance Tax purposes.
The criteria for limited company buy-to-let mortgages are fairly similar to the criteria for normal buy-to-let mortgages.
There are a couple of things to bear in mind though:
You can have as many mortgages as your lender will allow. Some lenders will let you have up to 4 or 5 mortgages with them. They’ll also often have a limit on the total amount you can borrow with them and a total borrowing limit across all lenders.
If the overall figure you want to borrow becomes too high then you’re essentially running a commercial operation and should therefore take out a commercial mortgage(s).
Rates for limited company buy-to-let mortgages tend to be a little bit higher than the ones for personal buy-to-let mortgages. You can view current rates using our best buy tool above.
You’ll need a commercial mortgage if the overall figure you want to borrow across lenders is too high for a limited company buy-to-let mortgage.