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Posts Tagged 'Limited Company BTL'

Another 80% LTV product for Buy to Let Landlords

It’s good to the see one of our lenders return to 80% LTV on single lets. They have two and five year fixed products for BTL mortgages which come either with a free or discounted valuation.

Available for personal and limited company ownership. Portfolio landlords welcome.

Tenants working, students and DSS on AST. Corporate Lets and Local Authority & Housing Association Lets (prior approval required).

They also finance HMOs and multi unit blocks and products available at both 65% and 75% LTV.

To find out more about this product and our services please contact us.

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ILA – The Hidden Costs of a Guarantee

When taking out a BTL mortgage 99% of lenders require the directors and possibly shareholders to personally guarantee the mortgage.

This guarantee needs witnessing from a solicitor who must explain the legal implications of the document. This is called Independent Legal Advice (ILA).

A lot of brokers do not mention this process so when it comes to signing in front of a solicitor there can be a big surprise. We have seen some fees as high as £800 to witness one document!

There can be a choice though as lenders fall into these categories:

  • ILA always required
  • ILA can be dispensed with under certain circumstances. Usually when the guarantors are the same as the directors
  • The guarantee can be witnessed by anybody over the age of 18 who is not related to you or on the same loan
  • No Guarantee required

As we move down the list the cost to witness the guarantee reduces to zero and the process is much quicker.

Make sure you are fully aware of the options and costs as there can be significant savings with the right lender.

We always discuss this as part of the legal process. If you require help getting your next Limited Company BTL mortgage please contact us.

Product Choice

You may think it’s comparing one rate with another and that’s it, but there are so many other factors to consider when choosing a BTL mortgage. The more of these you want, the less choice you will have.

-Overall Cost. Look at all the costs including lender set up fee, interest over the term, interest on the fee if added to the loan, valuation and solicitors costs less any cashback. You will be surprised how many brokers just look at the lowest monthly payment, which may not be the best option.

-Service. Who would you rather use, a lender that takes one day to look at your application and documentation or three weeks? A great rate is not so great if you lose your purchase.

-Product Transfers, Further Advances, Repaying extra 10% per year, Free Valuations and Free Legals when you remortgage.

These are all very common when you own property personally but in the limited company market they are rare.

The ability to keep your mortgage with your existing lender can be crucial if market conditions change or to keep the remortgage costs down.

If any of these are vital then the best rate may not be the best product for you.

Talk to us to see how we can find a BTL mortgage to match your requirements.

Portfolio Landlords – BTL Remortgage

As a professional landlord it’s not just about the rate when choosing a BTL remortgage, it’s also speed if you are approaching your current lender’s variable rate. If you have a quick lender and competitive rates you are on your way to a speedy completion for your Buy to Let Remortgage.

These are some of things a lender can do to speed the process up:

  • Title Insurance
  • Electronic Signatures on Application Forms
  • Open Banking
  • Relaxed view on Independent Legal Advice

Ideally the lender should also offer the following:

  • Product Transfers
  • Extensive solicitor panel
  • Ability to repay extra each year

When comparing mortgages always add up all the costs including interest, all lender fees, legal costs and providing Independent Legal Advice for the personal guarantee.

Also look at the information they need and how long will it take you to prepare. The list includes:

  • Portfolio – will it meet the lenders LTV threshold, with most it’s 75% although some are less and others more
  • Rental Calculation across portfolio
  • Business Plan – doesn’t take long and lenders have their own format
  • Cash flow – the longest to do but not many lenders ask for it
  • Bank Statements confirming income on the portfolio
  • Tax Year Calculations, SA100 and Tax Year Overviews for at least two years
  • Limited Company Accounts for at least two years
  • EPC – are they all E or better. If F or G a lender may ignore the income but still include the debt

We’ve been doing this type of mortgage for many years so please contact us if you need help on your next BTL remortgage.

Remortgage of BTL Portfolio in Lancashire

£330,000 refinance from a bank that says No!

Due to the age of the applicants, their existing lender had given notice to a long-established Lancashire property company to move it’s property portfolio to another bank or sell.

The directors were in their 80’s and spent most of their time overseas and didn’t own a main residence in this country. To add to this, their tenants received housing benefit which some of the banks didn’t like.

We kept in constant contact with the outgoing lender and updated them at every stage. This gave the bank the confidence to grant extra time in a complicated restructure.

Never to back away from a challenge, we arranged with the directors for a UK based relative to become a director. This gave a new bank comfort in succession planning and where other brokers had failed we obtained the finance needed. The properties have been retained giving the clients a comfortable income in their well-earned retirement.

Case Study for New Build Flats

A Cheshire based company had built four apartments with total land and build cost of £200,000 and the properties were valued at £440,000.

Lenders had been approached by our clients and all were either not interested as they were property developers, or wanted them to leave some of their money in the project so they only had had access to a maximum loan of £180,000. This was seriously going to affect their future projects and expansion plans.

By getting to know their medium and long-term strategy we presented this to a specialist property lender. By outlining their plans the lender was satisfied that the company had a long-term viable plan which they wanted to support and offered 75% of the value to them. So we have two happy directors who now have an extra £150,000 to go towards their next project.

Your property may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it.

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