Limited Company Holiday Let Mortgage(LHOL70)

 

* Based a mortgage loan of £350,000 over a 25 year term

Application Fee	£250 (payable on application and non-refundable)
Arrangement Fee	1.5% of loan (less the application fee) - can be added to loan
Valuation Fee	£525 for properties up to £500,000 in Wales (subject to confirmation from the valuer) and by request for all properties in England / properties over £500,000 in Wales. (Some properties depending on type may require a specialist valuation regardless of their valuation and a fee quotation will be required).
Maximum Loan to Value (%)	75%
Loan size	£50,000 to £1,000,000
Repayment Type	Capital and Interest only / Interest Only. For those loans on an interest only basis, all borrowers will be required to provide evidence of how they intend to repay their interest only loan.
Early Repayment Charge	During the first three years, an early repayment charge of 1% of the loan amount is payable. After this period, no early repayment charges apply.
Overpayments	Regular overpayments are permitted. Regular overpayments are amounts collected with, in addition to, your monthly mortgage payments. You may make capital repayments without an early repayment charge being levied as long as the mortgage is not redeemed in full (a minimum balance of £500 must be kept on the account) within the 3 year early repayment period. Following receipt of a lump sum payment, the amount that you owe, and so the amount of interest you pay is reduced immediately.

 

• Please note that our holiday let mortgages are available to existing property owners who would like to purchase/remortgage a property which is used for holiday letting, subject to being located in an area commensurate with holiday letting.  
• The rental calculation is based on the actual or expected rental. Rent must cover 145% of the ‘stressed mortgage payments’. The stressed mortgage payment is based on the product rate +2% or 5.5% whichever is higher. 
• Personal income will not be considered when assessing affordability.  
• Maximum age at end of loan for main applicant = 75
• Minimum property value = £75,000
• For house purchase, the maximum Loan to Value is the amount of a mortgage loan expressed as a percentage of the purchase price or valuation whichever is the lower.  
• This mortgage is not portable and accordingly, if you move house, you will not be able to transfer these product terms.   
• For loans above £1,000,000, please contact us to discuss.  
• Holiday Letting Agent letter to be provided detailing the level of income that can be generated by the property which must be verified at valuation by the Society valuer.
• Our Mortgage Services Tariff gives details of the charges payable in connection with mortgage applications and additional administration following completion of your loan.  
• The Directors / Shareholders must already be a property owner(s) – this can be the property where they reside, or an existing buy-to-let / holiday let property.
• The Directors / Shareholders must be the same individuals and own 100% of the company between them – maximum 4 Directors.
• The company must be registered in the UK and subject to UK corporation tax.
• New Limited Companies set up as SPV’s (special purpose vehicles) are allowed.
• A Personal Guarantee will be required from all Directors / Shareholders for the full value of the mortgage.
• Deposits for property purchases must be provided by the Directors / Shareholders (as individuals). Deposits from inter companies are not allowed.
• Mixed commercial / residential properties are not allowed.
• The mortgage must meet our holiday let criteria on a stand-alone basis – we will not allow top slicing from the personal income of the Directors / Shareholders.
• The highest earning Director / Shareholder must have a minimum income of £35,000 from employment / self-employment excluding DWP / benefit income.
• The owner / vendor of the property must have been the current registered owner with the Land Registry for a minimum of 6 months.
• The property must be of traditional construction and verified as such by an independent valuer.
• The property must have a minimum EPC rating of “E” i.e. it must be rated A – E.

• Interest will be calculated daily on the outstanding balance of the term loan at 0.95% above our SBS Variable Base Rate which is currently 5.80% per annum. Our SBS Variable Base Rate is subject to fluctuation from time to time and may change at our discretion, however will never fall below 3.00%. Notification of changes to our SBS Variable Base Rate and any resulting change to the repayments due are made as soon as reasonable practicable following such a change.

General Limited Company Criteria
The Society will require the following documents as part of the application process:

• The Certificate of Incorporation.
• The Memorandum and Articles of Association.
• A satisfactory accountant’s reference together with the latest 3 years financial statements assuming it is an existing limited company.
• A satisfactory accountant’s reference including the latest 3 years financial statements for all businesses of the directors / shareholders together with last 3 years tax returns.

Property is unacceptable if it is:

• A shared ownership property