Ltd company BTL options and timings

by Readers Question

A month ago

Ltd company BTL options and timings

Make Text Bigger
Ltd company BTL options and timings

We are about to purchase our first BTL through a Ltd company, I already have a couple in my own name, but have decided to shift to the Ltd co. model.

The property will be purchased upfront with cash, however I would then like to mortgage the property to free capital up for future purchases.

My main questions are around options and timings, at what point in the cash purchase price are we able to start applying for the mortgage? I have heard we may have to own the property for 6 months before we can start applying, but that there are lenders out there who may let you do it right away?

Would love to hear from anyone who has gone through the same process.

Many thanks

Luke



Comments

Neil Patterson

A month ago

Hi Chris,

I will ask one of my Broker partners to help comment as well.

You are correct there are lenders that will consider remortgaging within 6 months. The key is that they understand why you are remortgaging and there is a good reason. What lenders are wary of is lending against an inflated value compared to purchase price and being over exposed on Loan to Value.

If you combine two criteria needs such as remortgaging inside 6 moths and Ltd company your options will be more limited.

Howard Reuben

A month ago

Hi Chris

We go through this process on a daily basis ... for our hundreds of existing and new Clients, so I can offer you a perspective from a very active mortgage processor.

Re "The property will be purchased upfront with cash, however I would then like to mortgage the property to free capital up for future purchases." As Neil said above, as long as you can show a plausible and viable explanation why you had to buy with cash, and that you are not trying to remortgage based on a new and unreasonable valuation, then there are indeed lending options available (subject to all of the other usual criteria too of course).

Don't forget to buy in the Ltd Company name too - you can't simply "remortgage" from your personal name to a Ltd Company name as part of a new mortgage arrangement.

Re "My main questions are around options and timings, at what point in the cash purchase price are we able to start applying for the mortgage? I have heard we may have to own the property for 6 months before we can start applying, but that there are lenders out there who may let you do it right away?"

This depends on which lenders you qualify for. If you own 4 or more BTL properties (owned across all names / entities) then you would be subject to the new (PRA led) specialist underwriting rules for 'portfolio landlords'.

Some lenders do indeed allow 'day one' remortgages, and others would make you wait for 6 months (or sometimes longer).

So, to determine which lender, product and rates / fees etc., you would be eligible for, our team of specialist BTL advisers are available to contact via my member profile link above.

Hope that helps.

NW Landlord

A month ago

I am currently doing this with two we have bought and refinancing in ltd and it’s is taking ages they want so much more info I have had mortgage offers for 3 months and the whole process has now taken 7 months absolute crazy and it’s just getting so hard that I’m not bothering again it’s just so much hastle it’s just another nail in the coffin I have been in the property game for 17 years and never known anything like it for portfolio landlords it’s unfair unjust and a complete sabotage of our industry ( may sound dramatic but it’s my experience and opinion )


Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

UK Landlords Campaigning To Save Tenants From Rent Hikes and Eviction