First-Time Buyer Limited Company  

Can I get a mortgage through a limited company as a first-time buyer?

Yes, technically it is possible, but it’s not as simple as people imagine. Going down the limited company route, you’re dealing with a much smaller pool of lenders – specifically those who are comfortable lending to first-time buyers using an ‘SPV’ or Special Purpose Vehicle. That’s the type of company you have to set up for a limited company Buy to Let.

You still need a solid personal income and, in some cases, experience in the property space. The property itself also has to stack up, with a strong enough rental yield so that the lender is happy with the risk profile.

Before you dive too deep or waste time, I recommend speaking to a broker. We can look at your situation and give you a realistic idea of what’s possible. That will help you avoid going down the wrong path.

What are the typical requirements to apply for a mortgage through a limited company as a first-time buyer?

When you’re buying through a limited company, the pool of lenders is smaller, which means the chances of being turned down naturally go up. You always need to meet a lender’s specific criteria. You’ll also run into stricter affordability checks and in many cases, extra packaging requirements.

If you can’t provide everything they need, the application can fall apart much faster than with a standard mortgage. Limited company purchases also come with higher interest rates, larger arrangement fees and generally higher expenses across the board.

You also need to factor in valuation fees, solicitor fees and additional legal work. Finally, the limited company must be specifically set up for renting and buying properties.

What documents do I need to provide for a mortgage through a limited company as a first-time buyer?

The documentation is similar to any other standard mortgage application. We need proof of income via your payslips or, if you’re self-employed, your SA302s, tax calculations and tax year overviews.

You’ll also need personal bank statements plus a form of ID, like your passport or driving licence. But if you’re buying through a limited company, you can expect more on top of that.

Lenders often ask for business bank statements and company accounts because they want to understand not just your personal position, but the financial health of the company as well.

What’s the maximum that can be borrowed for a mortgage as a first-time buyer? What’s the minimum deposit for a first-time buyer? How does this differ via a limited company?

For a first-time buyer purchasing a residential property in their own name, most people can borrow somewhere between 4.5 and 5 times their annual income. The minimum deposit is usually 5%.

But when you’re purchasing via a limited company, the property will be a Buy to Let and you therefore need a minimum deposit of 20%.

In terms of what you’re able to borrow, this is an investment property, where borrowing is driven by the expected rental yield as opposed to your personal income. Your own income might need to meet a minimum threshold, but it’s not what drives the loan amount.

What if I’m a first-time buyer and have bad credit? Will this affect me getting a mortgage through a limited company?

If you’re a first-time buyer and you do have bad credit, it all comes down to credit score. The lender will still complete a personal credit check, and whether you’re accepted will ultimately depend on what’s on that credit file and if it fits criteria.