The Client: An experienced portfolio landlord with five buy to let properties, owned in both their personal name and an SPV limited company.
The Property: Already owned in our client’s personal name, the property was a two-bedroom mid terraced house located in a suburb near Manchester. The location would give tenants easy access to Manchester and Leeds city centres, and the picturesque Peak District.
The Finance: Due to his growing portfolio and after thorough consultation with an accountant, our client wanted to move this personally owned property into his SPV limited company as it would be more tax-efficient. As a sale and purchase transaction, our client required a limited company buy to let mortgage to complete the purchase.
The Challenge: Firstly, the only income our client received was from his buy to let portfolio, meaning that some lenders would not accept the application despite it being via a limited company. Secondly, the client approached us during the second national lockdown when many lenders were adjusting their mortgage pricing, making it difficult to secure the competitive rate our client was after as the market changes daily.
The Solution: As an independent, whole of market mortgage broker, we have access to many specialist buy to let lenders. With a little research, we sourced a lender that would accept our client despite his only income being from rent. We were then able to secure a competitive limited company buy to let mortgage with a free valuation and low arrangement fee! Here are the details:
Property value: £85,000
Loan amount: £63,750
Rate: 3.14% two-year fixed
Term: 25 years, interest-only
Mortgage payment: £167 per calendar month
Lender arrangement fee: 0.5% (£318.75)
Rental income: £495 per calendar month
Gross yield: 6.9% pa
Application: SPV Ltd. Company
20th January 2021