Limited Company Mortgages over Traditional Mortgages
More and more consumers are opting for limited company mortgages over traditional mortgages. The distinct benefits that come with this type of mortgage make it a tempting opportunity for many, and the skyrocketing interest rates on more traditional mortgages are only adding to the appeal.
A Limited Company mortgage is an advantageous method to invest in real estate through a UK-based Special Purpose Vehicle (SPV) by minimising taxes. We can also assist clients who want to buy or remortgage their homes through an LLP for Buy-to-Let properties.
While these kinds of finance are currently relatively uncommon, tax benefits of buying property through a limited liability company may be significant to many investors with small or large portfolios, particularly for higher rate taxpayers.
What are the benefits of a limited company mortgage over a traditional mortgage
There are a number of key benefits that come with choosing a limited company mortgage over a traditional mortgage. These include:
- No restrictions on how many buy to lets you can have – Typically residential buy to let lenders will restrict you on how many buy to lets you can have with one lender and in total, limited company buy to lets dont have the same restrictions.
- Increased flexibility – another big advantage of a limited company mortgage is the increased flexibility it offers. This includes things like the ability to make overpayments, underpayments, and even take payment holidays if needed. This can be a lifesaver if you encounter financial difficulties at any point during your mortgage term.
- Tax advantages – another key benefit of a limited company mortgage is the fact that they offer tax advantages. This includes the ability to offset your mortgage interest against your corporation tax bill, which can save you a lot of money (particularly if you are a high earner).
How do you go about getting a limited company mortgage
If you are interested in getting a limited company mortgage, the process can be a bit daunting. However, with the help of a good mortgage broker, it can be relatively easy.
The first step is to find a good broker who has experience in arranging limited company mortgages. They will be able to guide you through the process and help you find the best deal for your circumstances.
Once you have found a good mortgage broker, the next step is to gather together all of the required documentation. This includes things like your last three years’ worth of accounts, your company’s Articles of Association, and your personal financial information.
The final step is to submit your application to the lender. Once your application has been approved, you will be able to start the process of arranging your mortgage.
What are some of the things to consider when choosing a limited company mortgage
When considering a limited company mortgage, there are several factors you will need to take into account. These include:
- The interest rate – one of the most important factors to consider when choosing a limited company mortgage is the interest rate. Make sure to compare the rates offered by different lenders to find the best deal for you.
- The term of the mortgage – another important factor to consider is the term of the mortgage. This is the length of time over which you will be repaying your mortgage, and it is important to choose a term that you are comfortable with.
- The repayment schedule – another thing to consider when choosing a limited company mortgage is the repayment schedule. This is the schedule of payments that will be made to the lender, and it is important to make sure that you are comfortable with it.
- The fees and charges – finally, another thing to consider when choosing a limited company mortgage is the fees and charges associated with the mortgage. Make sure to compare these between different lenders to find the best deal for you.
How does the process of obtaining a limited company mortgage differ from that of a traditional mortgage
When it comes to the process of obtaining a mortgage, there is a big difference between getting a traditional mortgage and getting a limited company mortgage.
With a traditional mortgage, you simply need to provide your personal financial information and the financial information for your home. The lender will then use this information to decide whether or not to approve your mortgage.
With a limited company mortgage, you will also need to provide the financial information for your company. This includes things like your last three years’ worth of accounts and your company’s Articles of Association. The lender will use this information to decide whether or not to approve your mortgage.
Overall, the process of getting a limited company mortgage is much more complex than the process of getting a traditional mortgage. However, with the help of a good mortgage broker, it can be relatively easy.
