Commercial mortgage - is 70% LTV the max
Discussion
I’m in the process of buying an office building to move my company into.
I’m dealing with a broker and they have suggested I need to set up a new LTD spv buying it through that separate to my company and effectively renting it to myself.
This was inline with my original thoughts.
The building needs a fair bit of work so they also suggested potentially doing it through some expensive looking bridging loan, doing the work and then getting the mortgage on the property 6 months down the line on the new valuation.
Ultimately that doesn’t seem to make sense to me when the fees were circa 30k.
I want to just do a straight mortgage, the broker has said the figures look fine from an accounts/affordability point but that 70% LTV is the best you can get.
I’ve seen 80% LTV being advertised online for owner occupiers but they are all on lead gen sites.
Anyone been through this lately?
I’m dealing with a broker and they have suggested I need to set up a new LTD spv buying it through that separate to my company and effectively renting it to myself.
This was inline with my original thoughts.
The building needs a fair bit of work so they also suggested potentially doing it through some expensive looking bridging loan, doing the work and then getting the mortgage on the property 6 months down the line on the new valuation.
Ultimately that doesn’t seem to make sense to me when the fees were circa 30k.
I want to just do a straight mortgage, the broker has said the figures look fine from an accounts/affordability point but that 70% LTV is the best you can get.
I’ve seen 80% LTV being advertised online for owner occupiers but they are all on lead gen sites.
Anyone been through this lately?
When I've done it in the past I've used Asset Finance to purchase things like furniture and pay for refurbs. Your business would pay for them so it wouldn't be coming from you or the new ltd co. That should be a lot cheaper overall than bridging and certainly a lot easier on cashflow.
A ltd co is probably the way to go if you plan on buying up more properties in the future. If you only want this one, then keeping it in your own name may make more sense. When I went through this with my accountant, that was the main consideration.
A ltd co is probably the way to go if you plan on buying up more properties in the future. If you only want this one, then keeping it in your own name may make more sense. When I went through this with my accountant, that was the main consideration.
Dick Dastardly said:
When I've done it in the past I've used Asset Finance to purchase things like furniture and pay for refurbs. Your business would pay for them so it wouldn't be coming from you or the new ltd co. That should be a lot cheaper overall than bridging and certainly a lot easier on cashflow.
A ltd co is probably the way to go if you plan on buying up more properties in the future. If you only want this one, then keeping it in your own name may make more sense. When I went through this with my accountant, that was the main consideration.
I had planned on funding the fit-out from cash flow but will look at asset finance. We are going through a period of pretty quick growth so it would be nice to keep as much in our float as poss.A ltd co is probably the way to go if you plan on buying up more properties in the future. If you only want this one, then keeping it in your own name may make more sense. When I went through this with my accountant, that was the main consideration.
I currently don't have plans to buy any more commercials but at the same time, I'm not looking to take out my initial deposit through the rental straight away so LTD company makes sense I think.
I'm trying to get out of Resi as I've had a bad time with it over the last year of so with non paying tenants so this just makes more sense to me at the moment.
Just looked at Shawbrooks site and they have 75% LTV on there so might give them a buzz.
I would have loved to get a deal at 80% as it would keep some pressure off me personally but not seen anything concrete.
matjk said:
When we got our commercial mortgage (HSBC) they were much happier it being an owner / occupier set up.
Setting up a new LTD company with no trading history leaves the bank very exposed if you decide to stop paying the mortgage
Wouldn’t have thought it would make much difference as they would surely ask for personal guarantee or security on your own home.Setting up a new LTD company with no trading history leaves the bank very exposed if you decide to stop paying the mortgage
matjk said:
When we got our commercial mortgage (HSBC) they were much happier it being an owner / occupier set up.
Setting up a new LTD company with no trading history leaves the bank very exposed if you decide to stop paying the mortgage
It's quite normal these days, with zero issues. They just require a lease to be set up between Holdco and Tradeco.Setting up a new LTD company with no trading history leaves the bank very exposed if you decide to stop paying the mortgage
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