Ltd Company Mortgages – Escape Velocity from Personal Finances?

Ltd Company Mortgages – Escape Velocity from Personal Finances?

9:01 AM, 19th January 2024, About 5 months ago 3

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Hi everyone. First time posting, but I have been lurking here for a while.

I currently have one mortgaged property in my limited company, and I am currently in the process of purchasing my second. The mortgage company wants to know everything about me, my day job, my savings and shoe size. I’m fine with this, as they need to manage the risk, the same was as I do with my tenants.

Is there a magic number of properties my company would need to own, or minimum business profits, that mortgage companies look for before my personal finances no longer become the deciding factor?

I am currently in the growing phase of our property holdings by reinvesting rental profits as deposits for more interest-only mortgaged property. For context, my first property is pulling in about 3x the mortgage interest cost, and the one I’m buying now should bring in about 2x the mortgage interest in the first year.

Any ballpark figures or information would be gratefully received. I know I’ve left this light on detail, but any words of wisdom from those who’ve done this before would be appreciated. It just seems to me that there must be a magic number at which point the business reaches ‘escape velocity’ from my personal finances and I am no longer the one being assessed personally for the mortgage.

Regards

James


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Comments

Graham Bowcock

9:48 AM, 19th January 2024, About 5 months ago

If there's a magic number I haven't found it yet.

My various companies have had fairly substantial loans over the years, for quite a number of residential and commercial properties.

As the directors always have to give personal guarantees then lenders require chapter and verse on them as individuals.

Alistair Cooper

10:13 AM, 19th January 2024, About 5 months ago

As Graham references the ‘magic number’ is in effect infinity with regards to residential BTLs
As all lenders require a full Personal Guarantee from any Shareholder over 19% (some lenders are now asking for PGs from any shareholder regardless of how small their holding) the lender is in effect lending to you and the company ‘wrapper’ is of secondary concern
PGs are not usually negotiable until you get into the realms of bigger commercial deals and even then are still usually reqd but can be ‘capped’ to a fixed amount

Howard Reuben Cert CII (MP) CeRER

20:25 PM, 20th January 2024, About 5 months ago

James, there are numerous lenders that we work with who will not be so bothered about 'minimum' personal income details from you, but there are still always the AML due diligence checks, credit risk profiling, assessing experience etc etc.

As long established brokers, and also portfolio landlords, we know the landlord-friendly lenders who are supportive and easier to do deal with.

To check your options, contact me via my profile link anytime.

Howard

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