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  • Tax

    Mortgages in a Ltd Company

    I've started this thread in the Tax tribe rather than the Mortgages one. The reason is that I've seen it claimed on this forum that Landlords incorporating to save tax will tie themselves into one lender. This is given as one reason not to incorporate.

    This claim is partially true. There are lenders that will want to put a charge on the company. This will then stop you getting mortgages with another company for other properties in your limited company. However the majority of mainstream lenders will put a charge on a property not on the company. This means you can have mortgages with different lenders on different properties within the same company.

    So when sourcing a mortgage for a property in a limited company it would be advisable to make sure the lender you are considering puts a charge on the property and not on the company.

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    I think you have been reading an old topic, it used to be the case.

    Originally lenders put lots of charges on the company, that then required you to get consent from them if you add a new property into the LTD Company with different lender.
    Many just got around this by setting up a 2nd Limited Company.

    These days it is much far less a concern. After the S24 tax changes, a lot of brokers pushed against this and lenders changed there tune. A minority of them now put these barriers in place.

    If you would like mortgage advice, would recommend a call to Bespoke Finance on 01133203240 or 08009202001 or email hello@bespokefinance.info we're well versed in LTD Company BTL.

    So no, I dont think it is true that "landlords incorporating to save tax will tie themselves into one lender". Lots of them out their enow.

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    _________________________________________________________________________


    My posts are not financial advice, just a rambling guy passing time on a coffee break.
    The team at Bespoke Finance offers advice, including Limited Company Buy-to-Let , HMO Conversion and Cheap Life Insurance.

    _________________________________________________________________________


    Completely agree with Adam.

    Outside the residential mortgage arena, charges (ie floating charges) are common place for commercial loans. And this philosophy was replicated until more lenders came into the market and commercial pressure meant these largely disappeared. There are some exceptions and a borrower should be careful as a floating charge could severely restrict future options. But a good broker should be able to advise you properly.

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    Chartered Accountant, Tax Advisor and Mortgage broker

    (and BTL portfolio owner)

    stuart@johnsonsca.com

    02039077022