Remortgage BTL properties under Ltd Company - Inheritance

Cindyyyy

hi all,
I received an inheritance in form of 3 units buy-to-let properties which are placed in a ltd company, which are owned by my deceased husband. He given it to me under a will. He recently passed away. Its such a difficult time for me. He inherited the 100% shares of this company to me as sole beneficiary under a will. He was the sole director and shareholder in this limited company. I would take the position in this company as a director and shareholder and continue to keep the properties by running the company. 

All these 3 properties in this company are interest-only mortgage and the mortgage term will going to end in coming few years from now. However, I am confused whether I need to remortgage these properties soon because of the borrower (which was my husband, who acted as director in the behalf of the company) has passed away, or I should keep it going for few years and remortgage it later when it comes to end. I want to keep these properties because there are tenants who occupied the properties and the rental income is sufficient enough to cover my living cost. 

My question is, 
Do I have to take out new mortgage (by remortgaging) all these properties because of he has passed away, as soon as possible? 
Or,
Its not necessary to remortgage it soon even though he has passed away because the properties are belong to the company and the mortgage term will still come to the end in coming years from now & the payment are still going to be made every month like usual?

I would highly appreciate your kind reply 🙏

silvercar

Sorry for your loss.

You need to be clear on the mortgage. If the properties are owned by the limited company then the mortgage should be in the companies name. Your husband may have signed for the mortgages as a director of the company. It may be that he acted as a guarantor for the mortgages, but the mortgages themselves are to the company.

Most likely is that your husband signed as a director of the company. In which case the mortgage is to the company and they continue without you needing to do anything. Without seeing the documents it is difficult to say, but if the company owns the properties, logically the mortgage would need to be to the company. It may be worth getting a solicitor or accountant to check this, don’t be railroaded by the bank to transfer anything or to offer personal guarantees at this stage. I don’t know whether you need to tell the lender that the director has changed or not, in any case they will know when you change the name of the director to yourself through Companies House.

DullGreyGuy

Cindyyyy said:

Do I have to take out new mortgage (by remortgaging) all these properties because of he has passed away, as soon as possible? 
Or,
Its not necessary to remortgage it soon even though he has passed away because the properties are belong to the company and the mortgage term will still come to the end in coming years from now & the payment are still going to be made every month like usual?

I would highly appreciate your kind reply 🙏

An LTD is a legal entity like you and me, like us it can own property, borrow money, pay taxes etc.

You need to get this clearer in your head and check the paperwork as you seem to mix things up a lot in your post saying you inherited 3 properties when in reality you inherited the shares of a company that owns 3 properties. 

Ordinarily if an entity owns a property they will be the ones on the mortgage however at times directors/shareholders have to give personal guarantees. So, firstly, were the mortgages really in your partners name or the name of the company? Secondly, assuming it's in the name of the company, is there any director/shareholder guarantees? If there are, what does the mortgage say happens if that person ceases to be a director/shareholder?

Cindyyyy

Thank you all for your kind responses 
i appreciate it a lot 🙏🙏

Hoenir

Cindyyyy said:

 I want to keep these properties because there are tenants who occupied the properties and the rental income is sufficient enough to cover my living cost. 

Property is an illiquid asset. Interest rates have risen significantly. Worth running the calculator over the potential impact. Even though the need of selecting a new product or remortgaging maybe some time away.