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Hi Harley,

Yes it certainly is possible. When borrowing against your own home - the amount that you can borrow will be dependant on your annual earnings (or combined earnings if you own it jointly with someone). Some lenders have different views on releasing equity/further advances, so the best thing you can do is work with a really good mortgage broker.

When it comes to the Ltd Co aspect, again do speak to a tax specialist/accountant, but it sounds like what you're referring to would be a simple Directors Loan to the company once the refinance funds have landed.

Hope that helps!

Steve

Stephen Pyke
Property Hub Invest

https://propertyhub.net/service/invest/

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Hi Steve,

Thanks for getting back to me. It's helped a lot.

Would you happen to know what the implications are getting a loan from a family member to the ltd company? Or whether this is better to go through the director (myself)?

Cheers,

Harley

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On 2/9/2021 at 10:08 PM, harleyjbailey said:

Hi Steve,

Thanks for getting back to me. It's helped a lot.

Would you happen to know what the implications are getting a loan from a family member to the ltd company? Or whether this is better to go through the director (myself)?

Cheers,

Harley

You can remortgage the home that you live in, and use those funds to invest in more properties. Let's say you borrow £50k, then you would lend that money to your limited company. Later on, you could take out £50k from your company tax free - i.e. you repay your loan. The amount you borrow is limited by two things

  • How high is your income? You can normally borrow 5x your annual earnings
  • What is the value of your property The max you can borrow is probably 90% of your property value

I wrote a primer on buy to let mortgages. I cover these concepts in more detail

It makes no difference whether your family member lends to you or your company directly. It simply presents a liability for your company  

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Vin Gupta
Property Investor and Developer
UK Property Blog: https://evolutionblogger.com/article/uk-property-articles
Travel Blog: https://soulfultravelguy.com/

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