Remortgage As A Limited Company

What are the main reasons for remortgaging via a limited company? What are the benefits?

This is all about mortgages on investment properties bought through a limited company. If you’re wondering if you can own a residential property through a limited company, the answer is no.

There might be the odd exception, but today we’re talking about investment properties and Buy to Let via a limited company.

The main reason to remortgage is to get a better deal. Limited company mortgages work the same way as personal ones, or any other. You might have a fixed rate or a tracker rate for the first two, three or five years.

At the end of that, you’ll go on to the lender’s variable rate, which will be expensive. We don’t want to spend any time on that at all, so we remortgage to a better rate.

How does remortgaging through a limited company or as a company director work?

If you’ve got a limited company mortgage, you’ve probably got your own mortgage in the background as well. A remortgage is the exact same principle.

We get to know your circumstances and what you want to do. Do you want to borrow more or make any other changes? We might have to account for criteria and the rental income.

We would make an application to a new lender. They will assess everything and value the property, then give us an offer and the solicitors will work it through to completion. The mortgages swap over, and if you borrowed extra, that is paid into your limited company to do what you want to do with.

It’s exactly the same process as with your own personal mortgage, just with a different type of lender. Most high street lenders don’t do limited company mortgages.

How long does the remortgaging process take via a limited company?

There’s no reason for it to take any longer than a residential mortgage. It can be slightly more complex on the legal side of things. We can normally get a limited company remortgage done in four to six weeks.

It can be a lot quicker, or slower, but that’s a good indication. Solicitors are an important part. There’s less to do on a remortgage, but they do control when things happen. Once we’ve got the mortgage offer, it’s down to the legal side, so it depends how swift they are.

What documents do I need to provide if I’m remortgaging through a limited company?

It’s a slightly different setup to a residential mortgage, as the loan goes through a separate legal entity. But lenders are still assessing you as an individual. Some will want your income details, although there’s not necessarily a minimum income requirement.

They will want your bank statements and some information about the property. They might want to see proof of the rental income, depending on the situation. They usually want your payslips, your accounts or tax calculations, bank statements and ID.

There will also be a valuation. There’s nothing too onerous and nothing you wouldn’t expect to have to provide. Very rarely is there anything to catch anyone out.

Are there many lenders that offer remortgages through a limited company?

Yes. Some you’ll have heard of, some you won’t. There’s lots of choice and lots of different criteria just like any other mortgage.

Are there any risks involved with remortgaging via a limited company?

The remortgage is not the risky part. Owning investment property is not without its risks. Any investment has those. The market might crash, and the property might go down in value. You could lose a tenant or have a bad one that doesn’t pay or trashes the place.

But the remortgage process itself doesn’t come with any risks, other than not being able to get the rate you want because of the criteria.