Let-to-buy mortgages can help you buy your next house and let out your former property - but there are lots of risks to factor first.
If you want to rent out your property and buy a new home to live in, Azembel can help find the right Let toBuy mortgage for you.
We will compare all the Let to Buy mortgages that meet your criteria, because this type of mortgage can somewhat be more complex than a standard residential mortgage, our let to buy mortgage experts are here to provide you with any advice you need. We have access to semi-exclusive Let toBuy deals that aren’t available from high street banks so get in touch today and see what we can do for you.
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· Let-to-buy process is having two mortgages with the same lender – this is current property buy-to-let mortgage and a standard residential mortgage on your next property where you will live.
· You’ll also need to have equity in your home to be able to raise a deposit for your next property purchase and meet the criteria.
You should know, that there’s a limited supply of Let to Buy mortgages available, which means demand is high so interest rates can be higher than for other types of mortgage. Our let to buy mortgage experts can search all the different options available.
There are lots of things to take into consideration before opting to go the let-to-buy since changes to stamp duty on second homes in April 2016, let-to-buy has become more expensive.
Let-to-buy products are for those who can't, or don’t want to, sell their previous property before buying a new home.
This could be for reasons such as working elsewhere in a new location for a few years and have planned to move back, or just because it is difficult to sell your home quickly.
The rental income projected should be enough to cover the repayments once it's remortgaged.
For example, if your property is worth£300,000 and you still have £200,000 to pay on the mortgage, you may need to borrow some of your equity as a deposit on your next property.
So a let-to-buy lender with a minimumLTV of 75% for buy-to-let could let you borrow £50,000 from the home as a deposit to purchase your next property and convert your previous mortgage to a buy-to-let.
When you choose to convert your home to buy to let and move to a new property -to-buy irons out some of the potential mortgage issues.
Let-to-buy can also ease the pressure off selling.
However, owning two properties, can increase your profit if property prices rise in the future.
Disadvantages of let-to-buy
Owning two properties is a if house values fall, you'll suffer double losses.
Let-to-buy mortgage can seem like an easier way to get when market is slow, but there are lots of risks so it's important to consider the options.
You could just move out, maybe into rented accommodation for a short period before securing a buy-to-let mortgage on your previous property.
Some lenders will give you a consent to let on your residential mortgage, which will allow you to move and let out your property for a relatively short length of time.
However, it could be difficult to get a second residential mortgage if you want to buy another property to live in for yourself while you have consent to let.