Limited Company Buy-To-Let Mortgages

It isn’t easy for an owner of a limited company to get a 95% loan-to-value (LTV) on a mortgage deal, as most lenders demand a minimum 10% deposit. If you can arrange a deposit value of 15-30% for your mortgage, you can qualify for deals with fewer interest rates and more flexible terms and conditions. Some lenders prefer that you have a large deposit as it diminishes the loan against the market value. However, some self-employed applicants can’t afford a large deposit, but you don’t need to worry because some lenders also tend to accept lower deposits. Knowing about your deposit target is very important when applying for a mortgage. Get in touch with one of our professional mortgage consultants at Care Financial Services to kick-start your mortgage journey correctly. 

Most lenders tend to assess the applicant’s income history for the past 2-3 years to decide how much they can borrow. For some limited company directors, it is seen as an advantage if the lenders assess the most recent figures if these have been at a constant high. If the income assessment and affordability are based on the most successful years of the business, then this would mean that lenders would allow the business to borrow more; This is because to calculate affordability, lenders use several incomes between 3.5 to 6 X an annual income to see how much a self-owned business applicant can borrow. There is no hard and fast rule, but it is commonly seen that the higher the income, the more the borrowing value. If you are looking for more assistance and help, then talk to our expert team at Care Financial Services so that we can help you highlight those lenders that look at recent years’ incomes to assess your borrowing power.

A lender’s intention never makes getting a mortgage hard for an applicant. It is just essential for them to know whether or not the applicant can afford to pay back the mortgage on time in the future; This is why they demand proof of your business to see if it is legitimate. It is a helpful idea to get your accountant on board early, even before you apply for a mortgage, so they can help you get all the paperwork ready. We have prepared a quick checklist for your accountant to make the process easier: 

• You will need up to three years of limited company accounts.
• Payslips got the past year showing your PAYE income.
• Evidence of paid dividends.
• Bank statements from recent three months (company and private).
• A Photocopy of your credit report.

Yes, you can apply for a limited company mortgage if you own a business. We at Care Financial Services help many limited company owners achieve their desired mortgage. We support and guide our customers by answering questions about which lenders to reach out to, getting a mortgage based on retained profits, and even which route to take if they have a bad credit history.

Many lenders offering limited company mortgages are not your typical high street lenders. These lenders tend to pre-qualify the application through a reliable mortgage broker like ourselves, who becomes a connection line between you and the lender. At Care Financial Services, we have encountered many cases where clients avoid applying for a limited company mortgage as they think they won’t qualify. We make it our duty to assist clients in believing in their ambitions and encouraging them to achieve the property they desire. 

If you are the director of a limited company with a bad credit history, then your choices in lenders may be limited. Bad credit can be seen in several ways, and lenders tend to judge such issues based on their severity and recent. Based on your credit history, you may need to see a proper bad credit mortgage consultant like Care Financial Services. At Care Financial Services, we try to help our customers with every obstacle they may face in their mortgage process. That is why we have made a list of wrong credit reasons below to help make it easier for you:

Late Payments

If you have a history of overdue payments, don’t worry because this is not considered a big unfavorable credit problem; it will not influence your mortgage application negatively and should be relatively straightforward. 

CCJs

A CCJ mortgage is seen as a medium to high risk for lenders; if

• If your credit file has a CCJ registered on it, and the amount is less than £1000, then there is a chance you can still get your mortgage.
• You’re registered CCJ is over £1000; then it can make the process a little complicated but still approachable. 
• a CCJ was registered over a year ago and is £2500 or under, so lenders will accept your mortgage application. 

A normal CCJ would lose its significance if registered over two years ago; hence, you will have many lenders available to choose from in such a situation. 

Bankruptcy

Bankruptcy is a high risk for lenders when checking your credit history. It is still acceptable to get a mortgage if you are facing a case of bankruptcy. Lenders might require a 25% deposit on the mortgage if you faced bankruptcy in the last three years. 

The lenders you choose to approach can be vital for your mortgage process, especially if you have faced bankruptcy. If you encountered a bank default over three years ago, then lenders may demand a 10-15% deposit. When it comes to credit history, the lender you choose is significant because different lenders have unique ways to assess mortgage applications. 

If you possess a bad credit record or can’t meet the requirements of your lender’s criteria, then it is a good idea to get in touch with a good mortgage advisor like ourselves so that we can guide you through what you need to do to obtain the perfect mortgage.

Obtaining a BTL limited company mortgage all relies on your corporation structure. Some structures will seem more profitable to lenders than others, so you must know what your lender will look for beforehand. Below we have listed down the criteria that your lender may look for when assessing your circumstances: 

• A ‘special purpose vehicle’ (SPV) company 
• A trading LTD company (non-SPV) 
• Forming a new LTD at the time of buying. 
• Personal guarantee ( whether your LTD firm has them or not) 
• LTV (loan-to-value) up to 75-80% 
• Rental earnings must be at least 125% of your monthly installments. 
• Good credit history/score (lenders may ignore minor problems in your credit history) 

• Limited company – This is a company you will not find on the stock exchange because private investors own it. These investors take charge of the company’s debts but only up to their invested percentage. 
• Ltd – This type of company is very similar to a limited company; that is why some people like to use LTD instead of a limited company. 
• SPV – SPV or ‘particular purpose vehicle is a limited company solely for buying, selling, or renting out different properties.