Can my limited company get a buy-to-let mortgage?
Limited companies can qualify for buy-to-let mortgages, depending on the company, the circumstances of the directors and the shareholders. The key to getting a good deal is all in the advice that you take from brokers. Read on to find out more about acquiring a buy-to-let mortgage as a limited company.
A lot of buy-to-let mortgage applications come from landlords who have recently set up an SPV limited company, meaning that the company doesn’t have income. Lenders will underwrite the SPV as if you were applying for a buy-to-let in your personal name: for example, as long as you own your own home, there are lenders that will consider an application if you earn less than £25,000 a year and are the sole director of an SPV.
Older SPVs however will need to show two years of accounts. If the income in the SPV is less than £25,000, the lender may assess the director’s personal income, but there are generally a lot of buy-to-let mortgages available to SPVs.
Trading limited companies
Not many lenders offer buy-to-let mortgages to trading limited companies because they are far more difficult to underwrite.
If you are to be considered, lenders will again consider two years of strong accounts. So long as you can prove taxable income, regardless of amount, some lenders will consider your business, though other lenders look for over £25,000 in profit.
Lenders will also want reassurances of other income. If a company has a slow year or is declining in profit, directors will struggle to get a mortgage.
Some clients use inter-company loans to purchase buy-to-let properties. For example, the directors may own a trading limited company but set up a separate SPV to hold a property. The lender will want to ensure that your trading company is strong enough to support a withdrawal of funds. In all cases, lenders require that directors provide a personal guarantee.
For a free, no obligation quotation or if you would like to simply discuss your options please don't hesitate to contact us on 01202 937880.