Generally, when you apply for a mortgage as a limited liability company, you will get more mortgages than applying for a mortgage individually. In addition, by paying rental income tax, you will generally pay less tax. On the other hand, the process of getting a mortgage for a limited company is more straightforward and simpler, and lenders tend to dedicate their products to companies that operate in the field of real estate investment and the form of a limited liability company. Many companies provide housing for their managers and apply for mortgages for this purpose, so the limited company is one of the applicants for large mortgages. Lenders also consider the terms easier for them and offer them benefits in a buy-to-let mortgage.
But buy-to-let mortgages for limited companies have differences in addition to the similarities that regular mortgages have:
- Limited companies are usually formed with the aim of buying, selling and managing real estate. For this purpose, lenders also consider easier conditions and grant them benefits in the buy-to-let mortgage.
- The evaluation criteria for limited company mortgages by lenders are very different from each other. Therefore, the managers must care about choosing the lender and the type of products offered by them.
- Lenders usually review the personal financial history of company managers and obtain the necessary guarantees. In this regard, the lenders consider limited companies managers as self-employed applicants. As mentioned above, most lenders consider suitable conditions for lending to this group of applicants, and the usual challenges of getting a mortgage for self-employed workers do not include them.
But lending to these companies also has its challenges. For example, many lenders and mortgage brokers are reluctant to offer their services to these companies. One of the main reasons for this is the lenders’ concern about the reliability of their future income; because the income of company managers is the mediator of dividends. This means that the personal income of limited company managers depends on the company’s performance, which can fluctuate a lot and put much risk on lenders in the long run.
All of these factors make these companies’ revenue more complex than the workers whom the employer usually hires. However, lenders also often do not like complicated income conditions. At the same time, the processing time and evaluation of these companies financial capability are usually time-consuming. For this reason, you can use mortgage brokers who specialize in lending to limited companies and have sufficient experience in handling similar cases.
To Sum Up
SWG Mortgages experienced advisors are fully aware of these companies’ details and revenue complexities by doing several cases over a month and can help you prove your affordability to lenders. By using the services of our advisors, you can save time and money. With their extensive access to the products on the market, they can provide you with the best rates and conditions.
SWG is a market-wide organization and has access to every one of the lenders on the market, instead of being a restricted panel. This lets us search the market for the most appropriate product to meet your needs to ensure you get the most appropriate option at cost that is competitive. There are many costs involved in getting a remortgage broker that should be considered. Of course, depending on product types, the lender, or the remortgage requirements, some of these costs may be eliminated. For example, paying a deposit is not mandatory to receive remortgages. Instead, some lenders use your stock as a deposit. But usually; the most crucial cost that the borrower has to pay is the cost of repaying your mortgage early. If your contract is not yet completed, lenders will usually ask for penalties for early termination of your contract. Of course, these costs vary between different lenders and products. Therefore, before doing anything, it is better to thoroughly review and analyse all the costs associated with obtaining a remortgage.