Rental cover to be lower for Ltd company BTL applications than individual!Make Text Bigger
Foundation Home Loans will increase its rental cover requirements to 145% for individual applications, but leave limited company products at 125%.
Simon Bayley, commercial director, said: “There is no doubt that with the new restrictions on tax relief which landlords can claim back and now the hardening of the rental cover calculation, the limited company option is really gaining ground for a greater percentage of landlords, particularly those who are coming to BTL at this point.”
“We have been delighted by the response to our limited company offering, which is priced at the same rate as our individual BTL products. Landlord are recognising the efficacy of a limited company option and as long as there is a recognition of the pros and cons, the scales are coming down more heavily in favour of this approach.”
New lender, Foundation Home Loans, has launched into the Buy to Let market specialising in criteria for investing in the name of a Limited Company post clause 24.
This niche will in particular allow new investors to start by avoiding the mortgage interest relief penalties of borrowing in a personal capacity without a mark up in rates over standard products.
I met with their Director of Business Development last week and Foundation have sprung from the old Gmac team who were massive pre credit crisis. The idea is to launch with niche criteria USPs to assist Landlords in the new evolving Buy to Let market.
- Limited Company interest rates the same as personal BTL
- First time landlords accepted
- No minimum income
- No minimum time employed or self employed
- Maximum age 85
- Max 75% LTV
- Stress testing at pay rate for 5 year products or 5.25% and @ 125% interest cover
- No Credit Score
- Remortgage from a Bridge inside 3 months at open market value
Standard products at 75% Loan to Value start at 3.69% for a 2 year fixed, 3.89% for a 3 year fixed and 4.39% for a 5 year fixed. All available in the name of a Limited Company SPV for the purpose of property rental.
Foundation will also consider customers with light adverse credit eg a satisfied default and one missed mortgage payment at a slightly higher rate.
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