10:44 AM, 20th May 2022, About 3 months ago 11
I’m looking to remortgage and fix for 5 years but I’ve found that 4 of my properties are being classed as commercial which is dictating higher interest rates and ‘setup fees’.
The four freehold properties each contain two self-contained flats and lenders are treating them as ‘Multi-Unit Blocks’ which is commercial lending. If I create leases for each of the flats then the lenders are happy to lend on standard residential terms which means the interest and setup fees are less (to the tune of 4k to 5k over the 5 years).
I’ve spoken to a solicitor who thinks that the following sequence would have to take place (at the same time) in order for the new mortgages to be secured on the new leases;
1. Freehold title transferred into company
2. Company issues leases in my name or my wife’s name or both
3. New lending secured on new leases
4. Old lending paid off
They thinks that because the freehold isn’t worth anything and the new leases are in our names (as is the original freehold title) then no Stamp Duty or Capital Gains would be due.
Can I get an opinion on this as it might be a massive spanner in the whole process of trying to keep our costs (and rents) down whilst in these turbulent times?
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