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Remortgaging First Property


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Hello all,

 

This is my first post on the forum but have done plenty of reading on here so I know how good the feedback is and value anyone's contribution to what I need advice one. 

 

I am a first time landlord who has been renting out a property since last November. The property is actually one I used to live in but when I moved to Manchester for a job I decided to get permission to let it out. This was always part of the plan but it happened a little sooner than anticipated as the Manchester job came out of the blue. 

 

In September I can re-mortgage the property and I look to release any equity and switch to an interest only mortgage. It is this re-mortgaging process that I could really do with some advice on and I'm taking into consideration the following points:

 

  • I would like to tie the property into a LTD company as this is the first in a collection of properties. Is it better for me to re-mortgage before setting up the company and putting the flat into the company? If I put the property into a company first, does that mean I would have to look for different mortgage packages for business'? If so, is this the best way as I know new companies may struggle in getting mortgages due to lack of financial history information.
  • Or do I look to re-mortgage whilst outside of a company and then set up the company? If I take this route, would it have to be a Buy To Let mortgage or could I take out a regular mortgage and get consent to let again?
  • NOTE: My solicitor let me know that as this is my first property it is simpler to transfer to a company and won't require taxes that would be otherwise paid. With this mind I'm leaning more towards sorting out the mortgage side of things before transferring the property into a company.

 

Any help on this matter would be greatly appreciated. 

 

Many thanks

Joe

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Hm, you definitely have to speak to a solicitor and tax advisor re the legal and tax implications, as it's not something mortgage advisors are qualified/authorised to advise on.

 

However, transferring a property into a company effectively means that you sell it to the company and as such the company buys it from you. Unless the company buys it for cash, you'll need a BTL mortgage from a lender who can offer such mortgages. Since this transaction will mean the end of your current mortgage and you want to avoid paying early repayment charges, you'll have to time the completion of the transaction after your current deal finishes in Sep.

 

You can setup the company even now, start the purchase and mortgage application now and then complete once the current mortgage deal is finished. At that point your current resi mortgage will finish and a new BTL deal via the company will start. It also means that you can't sort out the mortgage first and then transfer into the company, as it just doesn't work like that.

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