Let to Buy Mortgages
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What is a Let to Buy Mortgage?
A Let to Buy mortgage is when you let out your current home in order to be able to buy a new property to live in. This can be a good option if you are in a hurry to move or do not want to sell your current home. It is a popular choice among couples who perhaps want to buy together but not sell their own properties.
You will essentially be converting your current residential mortgage into a Buy to Let property through your current mortgage provider in order to rent it out. You will essentially have two mortgages but can usually use the rental income to cover repayments on your new mortgage; although you need to ensure you can afford it without rent coming in too.
Is Let to Buy right for me?
Whether or not this mortgage option is right for you will depend upon your own circumstances. Mortgages are big commitments and if you are not sure it is best to seek advice from a Mortgage Broker.
The upside of Let to Buy is you do not have to wait to sell your home to release equity and there is no property chain. If you are in a hurry to move and can afford to move without selling then this could be an option for you.
The downsides of Let to Buy is that you are obviously responsible for two mortgages which can be stressful, there will be times when the property you rent out can be empty but you will still be responsible for the repayments on the mortgages. There is a stamp duty charge when it comes to purchasing a second property that you will have to take into account and the mortgage deals can sometimes be more expensive due to the higher risk.
What are the lending criteria of a Let to Buy mortgage?
Most lenders want to see proof of an onward purchase in order to allow you to access Let to Buy mortgage products. They will usually offer a maximum 75% LTV meaning you will need equity in the existing home or have the deposit by another means.
You must be no older than 70 in order to access these deals but the age cap will vary depending upon lenders. You will obviously undergo another affordability check to ensure that you can afford your new mortgage and you will need to take into account landlord insurance and things needed to get your existing property ready to rent out.
What happens if I can’t switch to a new Mortgage Lender?
You can ask your mortgage provider for consent to let, which is them giving you permission to rent out your current property. Whether or not they will allow you is dependent upon your relationship with the lender and their specific criteria.
If you cannot access a Let to Buy mortgage or consent to let in your existing home you could always find out why and see if you can do anything to improve your application. You could also add home improvements on your current residential property in order to add value.
There are other mortgage options out there too and it is best to speak to a mortgage expert in order to receive tailored advice for your specific circumstance.
What if I only want to rent my property out for a short amount of time?
You will need to speak to your Mortgage Lender in order to receive consent to let. You can sometimes charge higher for shorter term lets but will usually have to provide essentials such as bedding and kitchen utilities.
How can a Mortgage Broker at Purely Financial help me?
Here at Purely Financial we have access to the mortgage market meaning we can access mortgage Let to Buy deals that are not available on the high street. We can help give expert mortgage advice on how the mortgage works and explain the importance of ensuring you can afford the mortgage payments.
We will help with your new mortgage application as well as ensure that you understand what you are committing to in terms of the mortgage repayments and agreements. We are authorised and regulated by the Financial Conduct Authority meaning we are qualified to give the advice you seek.
We can let you know what your options are and explore the right options for your specific circumstance. Get in touch with an expert Mortgage Broker today and take the stress out of mortgages.
Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.