The clients: Our client wanted to sell his residential property to his own limited company, arranging the finance on a buy-to-let limited company basis. At the same time, he was purchasing a new residential property.
The property: Located in London, his three-bedroom apartment was valued at £330,000. The client bought this in 2018 for £300,000, with a two-year fixed-rate mortgage costing £1,034 per month. The client’s new residential property purchase was a four-bedroom house in Surrey for £775,000.
The finance: The client required a buy-to-let limited company mortgage to finance the purchase from residential to his limited company at the highest loan-to-value (LTV) possible, allowing him to withdraw equity for the onward residential purchase.
He also required an 85 per cent LTV mortgage on his new home in Surrey.
- A lender offering buy-to-let limited company mortgages, allowing the client to sell the property to his own limited company and withdraw equity for the onward purchase.
- A residential lender offering 85 per cent LTV on a high purchase price of £775,000.
- The ability to add the lender arrangement fee to the loan.
- Both lenders need to be flexible and both deals to complete simultaneously so that the buy-to-let transaction does not jeopardise the residential purchase.
After sourcing the whole mortgage market, AWS Financial Services identified a competitive buy-to-let limited company product enabling the client to borrow £235,000 on an interest-only basis. This would mean monthly payments of £577, based on expected rental income of £1,350 per month. We were also able to secure a residential mortgage borrowing £658,750 on a market-leading two-year fixed rate, with both lenders willing to complete simultaneously.
As a bonus, the buy-to-let lender offered a free valuation, while both lenders offered the ability to add arrangement fees to the loan.
These features and benefits really appealed to our client and we were able to submit a decision-in-principle and get approval from both lenders before submitting the full application.
The application process: To support the mortgage application, the client supplied us with proof of identity, address and confirmation of income and proof that the limited company had been set up. We were delighted to inform our client that the lenders had issued formal mortgage offers for the full amount on both properties.
We arranged the completion of the buy-to-let purchase to coincide with the residential purchase simultaneously, allowing the client to move into his new home on the same day as his tenant moved into his buy-to-let property.
BTL Ltd Company
Property value: £330,000
Loan amount: £235,000
Rate: 2.95% 2-year fix
Term: 25 years
Lender facility fee: £1,995 added to the loan
Monthly payment: £577
Property value: £775,000
Loan amount: £658,750
Rate: 1.51% 2-year fix
Term: 30 years
Lender facility fee: £999 added to the loan
Monthly payment: £2,280