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Hello 

 

 

I'm currently in the process of buying a property via a ltd company. 

 

I'm being charged a floating fee and also £650 + VAT for a deeds of subordination? 

 

Has any one else had this issue? 

Can someone explain it in a clear way and what it means for me and my company?

 

 

Thanks 

Howard 

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i have done 2 ltd mortgages (house) in last 6 months and never come across this. There were the usual arrangement fees etc but not floating nor subordination as far as i recall. I went through a broker but he was paid by the bank so no charges to me

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14 minutes ago, haf1963 said:

i have done 2 ltd mortgages (house) in last 6 months and never come across this. There were the usual arrangement fees etc but not floating nor subordination as far as i recall. I went through a broker but he was paid by the bank so no charges to me

Thanks for your reply! 

 

I have spoken to a few other people and they never had this either. 

 

My lawyer is currently talking to them. 

My understanding is that they will have a hold over any other assets I put in the company. So potentialy no other lender will touch me if I have this hanging over my company. Also I will not be able to take money out my account via director repayment shares until the whole mortgage is paid off...

 

 

Also, did you have to pay two sets of lawyer fees? 

As you need to your own solicitor and then the lender has one also. 

 

 

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yes i used my own solicitor who worked with the banks solicitor to get everything done and i had to pay for both - which is standard practice. I had to give a personal guarantee against the loan as well as the property security. Obviously the ltd company is liable to pay the debt but, as far as i can tell, it doesn't affect getting another mortgage on another property. My second mortgage was with the same bank but it was treated on its own merits - same as first. I have no idea about taking money out as I have no need/plans to do that anytime soon. I do have a 'proper' well paid job as well so not sure if that makes our situations different. I have included the relevant section of my mortgage offer if that helps

 

Security

Property Address: xxxxxxxxxxxxxxxxxxxxxxxxx

Additional Security:Directors guarantees for the amount of the loan

Covenants: Rent to cover loan interest by 125% at all times.

 

Early Repayment Charges and Overpayments

Early Repayment Charge (ERC):

This variable rate product attracts 3% additional interest within the first 4 years for full or partial redemption based on the start date of the original mortgage account.

A fixed rate product incurs a charge of 5% (of the amount repaid) in the first two years, a 4% charge in the third year, a 3% charge in the fourth year and 2% charge in the fifth year for full or partial redemption (including any overpayments) during the fixed rate period

Fees

Arrangement Fee: 1.25% (£1,031) Arrangement Fee. A non-refundable Commitment Fee of 0.25% (£206) is payable upon the issue of a Facility Offer (if you choose to take a fixed rate product), with the remaining 1.00% (£825) being added to the gross loan amount and will be deducted from the advance on completion.

Valuation Fee:£211 please arrange for payment of this fee as soon as possible so that the valuation can be instructed.

Lenders Legal Fee:

Anticipated to cost £450 plus VAT and Disbursements.

Please note you are liable for all legal costs (both yours and ours) relating to the mortgage application whether or not the loan completes.

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8 minutes ago, haf1963 said:

yes i used my own solicitor who worked with the banks solicitor to get everything done and i had to pay for both - which is standard practice. I had to give a personal guarantee against the loan as well as the property security. Obviously the ltd company is liable to pay the debt but, as far as i can tell, it doesn't affect getting another mortgage on another property. My second mortgage was with the same bank but it was treated on its own merits - same as first. I have no idea about taking money out as I have no need/plans to do that anytime soon. I do have a 'proper' well paid job as well so not sure if that makes our situations different. I have included the relevant section of my mortgage offer if that helps

 

Security

Property Address: xxxxxxxxxxxxxxxxxxxxxxxxx

Additional Security:Directors guarantees for the amount of the loan

Covenants: Rent to cover loan interest by 125% at all times.

 

Early Repayment Charges and Overpayments

Early Repayment Charge (ERC):

This variable rate product attracts 3% additional interest within the first 4 years for full or partial redemption based on the start date of the original mortgage account.

A fixed rate product incurs a charge of 5% (of the amount repaid) in the first two years, a 4% charge in the third year, a 3% charge in the fourth year and 2% charge in the fifth year for full or partial redemption (including any overpayments) during the fixed rate period

Fees

Arrangement Fee: 1.25% (£1,031) Arrangement Fee. A non-refundable Commitment Fee of 0.25% (£206) is payable upon the issue of a Facility Offer (if you choose to take a fixed rate product), with the remaining 1.00% (£825) being added to the gross loan amount and will be deducted from the advance on completion.

Valuation Fee:£211 please arrange for payment of this fee as soon as possible so that the valuation can be instructed.

Lenders Legal Fee:

Anticipated to cost £450 plus VAT and Disbursements.

Please note you are liable for all legal costs (both yours and ours) relating to the mortgage application whether or not the loan completes.

What bank are you using?

 

Im in Scotland, there are only about 4 lenders that will lend to a LTD company in Scotland. 

 

That looks like you have a good deal with them.

 

I work also and have property in my personal name. 

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35 minutes ago, haf1963 said:

N&P (norwich and peterborough) - i am happy to provide my brokers details via pm if that helps - his fee was paid by N&P so no hit to me.

 

Thanks please PM me if you dont mind.

 

 

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