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Buy to Let Mortgages for Limited Companies: A Guide to Making the Right Choice

In recent years, the buy to let market in the UK has become increasingly competitive and complex. With changes in tax regulations and lending criteria, many landlords are now opting to invest in property through limited companies rather than as individual borrowers. As a result, the demand for buy to let mortgages for limited companies has surged.

If you own or are considering setting up a limited company to manage your buy to let properties, it is crucial to understand the ins and outs of limited company buy to let mortgages. This article will guide you through the key aspects of this type of financing, the criteria for application, and how Mortgage Knight can help you secure the best deal without affecting your credit rating.

Understanding Limited Company Buy to Let Mortgages

Limited company buy to let mortgages differ from traditional buy to let mortgages in several ways. The main difference lies in the way the property is owned and how the rental income is taxed.

When you secure a mortgage for a property held within a limited company, the lender will assess the company’s finances and creditworthiness rather than the individual directors or shareholders. This means that the company’s profit and loss statement, cash flow, and credit history will be under scrutiny.

Additionally, the tax implications for rental income generated within a limited company are distinct from those for individual landlords. While individual landlords are subject to income tax on their rental income, limited companies are taxed at the corporation tax rate. This difference in tax treatment has led many landlords to consider the benefits of holding their properties within a limited company structure.

Key Criteria for Limited Company Buy to Let Mortgages

Obtaining a buy to let mortgage for a limited company involves meeting specific criteria set by lenders. Typically, the following factors are taken into consideration:

1. Company Finances: Lenders will require detailed financial information about the limited company, including its annual accounts, cash flow projections, and corporate tax returns. The company’s ability to cover mortgage payments and other expenses will be thoroughly assessed.

2. Director Guarantees: In many cases, lenders will seek personal guarantees from the directors of the limited company. This means that the directors will be held personally liable for the mortgage debt in the event of default by the company.

3. Property Portfolio: The size and quality of the property portfolio held by the limited company will also influence the lending decision. Lenders may have restrictions on the maximum number of properties or the total value of the portfolio that they are willing to finance.

4. Affordability: As with standard buy to let mortgages, lenders will assess the rental income generated by the properties to determine the affordability of the mortgage. Rental income should typically cover at least 125% of the mortgage payments.

How Mortgage Knight Can Help

Navigating the complexities of limited company buy to let mortgages can be daunting, especially for landlords with multiple properties or those new to the limited company structure. This is where Mortgage Knight comes in to simplify the process and secure the best deal for your unique circumstances.

Mortgage Knight specialises in arranging mortgages for limited company buy to let properties. With access to a wide range of lenders and expert knowledge of the buy to let market, they can source competitive mortgage products tailored to your specific needs. Whether you are looking to expand your property portfolio or remortgage existing properties held within a limited company, Mortgage Knight can provide valuable assistance every step of the way.

Furthermore, one of the standout features of Mortgage Knight is that their services do not impact your credit rating. This means that you can explore your options and discuss your requirements with their advisors without any negative effects on your credit score. This commitment to responsible lending and customer satisfaction sets Mortgage Knight apart as a reliable and trustworthy partner for landlords seeking limited company buy to let mortgages.

Contact Mortgage Knight Today

If you own or are considering setting up a limited company for your buy to let properties, Mortgage Knight can offer expert guidance and support to ensure that you secure the most suitable mortgage deal. By partnering with Mortgage Knight, you can access their extensive network of lenders and benefit from their in-depth understanding of the UK buy to let market.

To find out more about how Mortgage Knight can assist you with your limited company buy to let mortgage needs, visit their website or contact their team directly for a personalised consultation. With Mortgage Knight by your side, you can make informed decisions and maximise the potential of your buy to let investments within a limited company structure.

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