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FAQ’s For Limited Companies Looking At Taking Out A Mortgage

If you’re a limited company looking at taking out a mortgage, you might be a little daunted and overwhelmed with the huge amount of information on the web as to the ins and outs of taking out a mortgage.
However as long as you know where to look, taking out a mortgage for your limited company doesn’t have to be as difficult as it sounds!
Your first question may be as simple as ‘can I take out a mortgage as a Ltd company?’. Depending on what exactly you’re looking to do then the answer is yes!
However, you might to delve a little deeper into the intricacies of taking out a mortgage, therefore to help make the mortgage process a little easier for you to digest, take a look at some of the frequently asked questions for limited companies looking to take out a mortgage.

Is it difficult for limited companies to take out a mortgage?

You’ll be relieved to hear that the answer to this is no! Problems arise when lender policy or income requirements may vary broadly across the market and can be rather complicated, causing borrowers to turn to brokers for assistance after being declined by banks on the high street.
The best advice when you’re looking to take out a mortgage is to be given the right advice by someone with experience who will know how best to advise you. Search Mortgage Solutions understand that there are many alternative choices of mortgages for different purposes, and not all with be applicable for every investor.
Every circumstance is treated individually with careful comprehensive consideration, therefore set the ball rolling and get in touch with one of our specialist mortgage advisers, and and even better, they charge no fee for the advice or for carrying out the complete mortgage application!

How old does the limited company have to be to quality?

Limited companies can be accepted by mortgage lenders as soon as the company has been set up.

Can mortgages for limited companies be more expensive?

Buy to let mortgages for limited companies generally are a little more expensive. As well as perhaps paying roughly 1 to 1.5% more on interest rates, the arrangement fees also tend to be charged as a percentage rather then a fixed amount meaning that it can be a bit costlier.


 How do lenders assess affordability?

Lenders will evaluate affordability on buy to let mortgages based upon you and your property. It is calculated by ensuring that the rent payable is over the minimum mortgage that will be required to be paid and your personal income in the majority of cases.

What are the advantages of limited company mortgages?

The dividend tax credit will be replaced by a new tax-free dividend allowance of five thousand pounds from April 2016 resulting in the potential to receive tax free dividend income from your investment properties.
Furthermore, as the rate of of corporation tax is currently 20%, your tax liability is lessened as opposed to if you were paying income tax as a higher rate tax payer at 40%. As funds may be able to be retained in the Ltd company, you may also reduce your potential tax liability by being able to control how much income is taken.

What are the disadvantages of limited company mortgages?

As well as being a little more expensive to set up in terms of legal costs and paperwork and being considered to be more complicated to set up, unfortunately there are no capital gains tax allowance when the company sells a property, in comparison to individuals selling a property who would have £11,100 allowance (2015/2016).
Also a more limited number of lenders to choose from may perhaps lead to more restrictive criteria and choice of products, and may also result in higher rates and less value on investment.
There’s no limit to the amount of questions and answers surrounding limited companies looking to take out a mortgage, these are just some of them so if you are looking to find out more or have any other questions regarding taking out a mortgage, then feel free to get in touch.


Search Mortgage Solutions
125 Deansgate,
M3 2BY
0161 710 2587


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