If you're considering investing through a limited company (SPV):

You might be under the impression that there's a minimum term a company must have been trading for, however there is no such requirement. In truth, you can get a mortgage arranged before setting up an SPV. A certificate of incorporation will be required before the mortgage can be completed.

Lenders will generally require the rental income to cover 125% of the mortgage payments if the mortgage is paid at an interest rate of 5.5%. To determine how much you could borrow you take the annual rental amount, divide it by 5.5% then divide the answer by 125%. For example with an annual rental income of £11,000 your calculation would be (11000 / 5.5%) / 125% = 160000.

You, as director, are the lenders main focus. They will be looking to ensure you can meet the terms of the mortgage. Your income, credit history, investment experience, job, and various other points are examined in the same way as a personal mortgage.

Generally directors will be required to give personal guarantees, meaning you will be personally obligated to fulfil the company's debt. This would be the difference in the value of the property against the amount owed.

Essentially, no. It's simply a personal mortgage in a convenient wrapper. There are a few points to consider though:

• Lender arrangement fees are usually slightly higher, since there's more paperwork required for you and the company.

• For the same reasons as above your solicitor costs will generally be higher.

• Some lenders will require you get independent legal advice about the personal guarantee you need to give. This will mean getting another solicitor who is not connected with the purchase to explain the personal guarantee and witness you sign the agreement.

• Less stringent affordability checks, which means you'll be able to borrow more.

There is potentially significant tax advantages by using a limited company, however you should always speak with a chartered accountant or specialist tax adviser before making any investment structure decisions.