11:01 AM, 25th January 2018, About 4 years ago 7
After incorporating our property rental business we now wish to raise finance. The whole process was dealt with by Cotswold Barristers who were very helpful. For all mortgaged properties the beneficial interest was transferred to the newco.
However, there were a number of unencumbered properties within the portfolio and for these the legal titles were transferred into the Ltd Co. in their entirely, not just the beneficial interest, so the company is the registered owner at Land Registry. Since incorporation further properties have been purchased by the Ltd Co. in cash. As a result we have a situation where some properties are still registered at Land Registry in our personal names while others are registered in the name of the Ltd Co.
We now want to raise Ltd Company buy to let mortgages on the properties where the legal title is registered in the name of the Ltd Company, but all lenders will still want to carry out searches on us as directors. Those searches will show a number of properties held in our personal names. The lenders will also want to see personal bank statements which will obviously not show any rental income or mortgage payments for the properties because these pass through the Ltd Company account. The lender will want to see sufficient personal income for the directors to cover the buy to let mortgage interest payments and we cannot show this. Obviously we would intend to explain the whole BICT concept to them but I suspect most lenders simply won’t get it and a lot of time and application fees will be wasted.
If anybody has incorporated their property rental business using a BICT and subsequently raised mortgages your advice would be appreciated on how to explain to a lender the disparity between the number of properties registered in your personal name(s) and the lack of rental income and mortgage payments on your personal bank statements.
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