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Buy-to-let mortgages: opportunities may be limited, but they still exist

can I still get a buy-to-let mortgage

Buy-to-let mortgages have been in the news a lot lately. Seen by many landlords in the last few years as a great investment opportunity, recent changes to buy-to-let tax relief have now left a number of individual landlords wondering whether it’s worth it. Yet renting still remains an attractive option for some house-hunters, and buy-to-let can be a sensible investment opportunity for landlords.

BEGINNERS GUIDE TO GETTING A BUY-TO-LET MORTGAGE

Limited companies are not affected by the changes to mortgage interest tax relief, and many landlords are now setting up limited companies to own the properties they rent out. So, is this a good idea?

Yes … and no. It really depends on your personal circumstances. Let’s look at some of the main pros and cons:

Advantages

  • Higher tax relief - under current legislation, limited companies will pay less tax than individual landlords
  • Dividends - you can potentially take up to £5,000 as tax-free dividend income
  • No income tax when investing profits to acquire further properties - corporation tax is about half the higher income tax rate
  • Personal funds can be drawn back out of the company - for example, mortgage deposits could be drawn back by way of a director’s loan

Disadvantages

  • No Capital Gains Tax allowance on sales - individuals can benefit from a Capital Gains Tax allowance (currently £11,100) when they sell a property
  • Additional costs - running a limited company incurs extra costs, such as accounts preparation and filing
  • Higher mortgage rates - many lenders charge companies more than they charge individual borrowers
  • Less choice - fewer lenders offer mortgages to companies

Transferring existing properties from individual ownership to a limited company can be complex and costly; but it can be done.

Much depends on your current circumstances and your future ambitions. The best thing to do - as with any mortgage issue - is to seek professional advice.

James

BB Mortgages provides specialist buy-to-let mortgage advice to landlords. For advice, call us on Newark 01636 674455

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Ellen King

Absolutely delighted with the service we received from Dean. The advice we received was timely and thorough; the service provided went above and beyond our expectations compared to other mortgage advisors we have used in the past and the whole application process was made straightforward and stress free. Overall, an excellent value for money service that I would highly recommend.


Ellen King

2019-09-04T15:53:10+00:00

Ellen King

Absolutely delighted with the service we received from Dean. The advice we received was timely and thorough; the service provided went above and beyond our expectations compared to other mortgage advisors we have used in the past and the whole application process was made straightforward and stress free. Overall, an excellent value for money service that I would highly recommend.

Miss Knight

We would like to take this opportunity to thank you for your efforts in making it possible for us to purchase our first property.  You have been brilliant and your services have been friendly, helpful, swift and professional.  We cannot thank you enough and it has been an absolute pleasure working with you.  What is known to be a stressful time has been very smooth and I have yourselves to thank for this.


Miss Knight

2016-03-22T17:24:36+00:00

Miss Knight

We would like to take this opportunity to thank you for your efforts in making it possible for us to purchase our first property.  You have been brilliant and your services have been friendly, helpful, swift and professional.  We cannot thank you enough and it has been an absolute pleasure working with you.  What is known to be a stressful time has been very smooth and I have yourselves to thank for this.

Mr L

Mr L hadn’t sold his house but had found the house of his dreams, we arranged a mortgage that allowed him to buy his new house without selling and a mortgage that was flexible enough for him to pay a large amount off when he sells his house.

2016-09-13T12:38:09+00:00
Mr L hadn’t sold his house but had found the house of his dreams, we arranged a mortgage that allowed him to buy his new house without selling and a mortgage that was flexible enough for him to pay a large amount off when he sells his house.

Miss G

Miss G sold her house and had found a new house, it all looked straight forward but she had a historical bankruptcy which meant lots of lenders were declining her. We found her a mainstream high street lender that would offer a mortgage even with her previous bankruptcy.

2016-09-13T12:43:22+00:00
Miss G sold her house and had found a new house, it all looked straight forward but she had a historical bankruptcy which meant lots of lenders were declining her. We found her a mainstream high street lender that would offer a mortgage even with her previous bankruptcy.

Mr W

Mr W works abroad but wanted to buy a buy to let property, most lenders will require him to own and live in in a mortgaged property in the UK, however we found a lender that would lend at sensible interest rates for a new buy to let purchase.

2016-09-13T12:48:10+00:00
Mr W works abroad but wanted to buy a buy to let property, most lenders will require him to own and live in in a mortgaged property in the UK, however we found a lender that would lend at sensible interest rates for a new buy to let purchase.

Mr C

Mr C wanted to buy a student house in Lincoln via a limited company to take advantage of the income tax benefits of this. He spoke with other brokers and high street lenders all of which said it wasn’t possible. We found a building society who specialise in this with sensible fees and interest rates.

2016-09-13T12:49:06+00:00
Mr C wanted to buy a student house in Lincoln via a limited company to take advantage of the income tax benefits of this. He spoke with other brokers and high street lenders all of which said it wasn’t possible. We found a building society who specialise in this with sensible fees and interest rates.

16 hours ago

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