Hi, and welcome back to our Pro Masterclass on property investments through limited companies. In this lesson, we're going to tackle one of the most important steps in your property investment journey: securing a mortgage through your limited company. There's a lot to cover, so let's dive right in. Getting a buy to let mortgage through a limited company has become much more common and there are plenty of mortgage products available. The first step is to speak to a good broker, someone who understands the specific needs of property investors using limited companies. A knowledgeable broker can guide you through your options and help you find the best mortgage for your situation. A common concern is whether you can access the same range of mortgage products through a limited company as you could if if you were buying personally. You'll find mortgages for limited companies aren't exactly the same, but they're very similar. With the growing popularity of limited company structures, more lenders are offering products specifically tailored to investors like you. You'll find many of the principles such as loan to value, stress tests, and interest rates are similar between personal and limited company mortgages. For example, when you apply for a mortgage through your limited company, lenders will assess the loan to value ratio, the amount you're borrowing compared to the property value. LTVs for limited company mortgages are typically around seventy five percent, similar to those for personal buy to let mortgages, though this can vary depending on your circumstances and the lender's criteria. Another critical aspect is the stress test. This is an assessment that lenders use to ensure your company can afford the mortgage payments, even if interest rates were to rise. Often, the stress test for limited companies is more favorable than for personally owned properties. For example, for personally owned properties, lenders typically look for 145% interest cover ratio, ICR. This means your rental income needs to cover 145% of a mortgage payment. For a limited company it's often lower at 125%. This means that you may be more likely to secure a mortgage via a limited company for certain properties. One question you might have is whether mortgages are more expensive when taken out through a limited company compared to buying personally. Generally speaking the interest rates for limited company mortgages can be slightly higher because lenders view lending to a limited company riskier than lending to an individual. However the difference in rates isn't as significant as it once was and the tax advantages of holding a property in a limited company often outweigh these slightly higher costs. Finally one area of confusion we often help clients with is that of personal guarantees. When you take out a mortgage via a limited company, you might think the mortgage liability stops with the company. This isn't the case, as the lender will ask you to sign a personal guarantee. This means that although the mortgage is in your company's name, you're personally guaranteeing the loan. If your company can't meet its mortgage payments, the lender will expect you to personally fund the deficit. It's a common requirement and something you should be prepared for. When applying for a mortgage, be prepared to give detailed documentation. Lenders will want to see your company's article of association, memorandum of association, and will check your company structure and SIC code, which identifies your company's business activity. They'll also need financial documents such as business and personal bank statements. Your company's ownership structure can also impact your mortgage eligibility. Lenders prefer simple, straightforward company structures. If you have multiple shareholders or complex share arrangements, it's essential to discuss this with your broker. They can help you find a lender who's comfortable with your setup and advise on any necessary adjustments to make your application more attractive. You might be wondering if it's possible to get a mortgage with a limited company that has zero trading history. The answer is yes. Lenders understand that new property investment companies won't have a trading history. They'll evaluate your personal finances and the projected rental income of the property. This is where the personal guarantee plays a crucial role in securing the mortgage. Let's talk about funding your purchase, specifically deposits. Many investors will want to use personal cash to fund the deposit of the property as the company's newly formed and has no assets. If you have personal cash that you want to use, you can inject this into your company through what's known as a director's loan. This allows you to lend your money to your company, which can then be used for the property purchase. You can repay this loan to yourself at a later date when the company is profitable. Now, let's imagine you've been trading for some time and you have profit building up in your business, you can use this retained profit to grow your portfolio by using it as a deposit for your next purchase. Plus, as your property portfolio grows you might qualify for a portfolio mortgage where one mortgage covers multiple properties. This can simplify your finances and potentially offer better rates, but it also requires a strong financial foundation. And what about using profits retained in another company? I'll give you an example. Let's say you've got a contracting business and want to invest in property using the profits from this company. This is possible through an intercompany loan, where one company lends money to another, allowing you to use the retained profits from a different business to fund your property investments. This can be a bit more complex, so it's a good idea to get advice from an accountant to ensure everything is done correctly. To wrap up, getting a mortgage through a limited company is very common practice, and while there are some differences compared to personal buy to let mortgages, the process is straightforward with the right guidance. We've covered everything from personal guarantees and LTVs to funding your purchase and the importance of a good broker. The key takeaway is working with professionals who understand limited company structures can save you time, money, and potential headaches. Of course, to get a mortgage, your company will need a bank account, and that's what we'll be discussing next. Thank you for joining me, and I'll see you in the next lesson.