Finding The Best Let To Buy Mortgage Deal For Your Circumstances
A let-to-buy mortgage allows you to keep your existing property whilst purchasing a new residence to live in. This can provide valuable breathing space if you're in a property chain, or offer security if you're looking to move in with a partner. Whatever your situation, there is a range of let-to-buy mortgages on the market that can enable you to achieve your future plans.
When the Bank Says No can help you seek out the right deal for your needs and finetune your application to provide the best chances of mortgage success. Even if you have bad credit or have previously been rejected for finance, we're here to take the fear out of mortgages and show that anyone can become a successful landlord.
What is a let to buy mortgage?
A let-to-buy mortgage is used when you want to rent out your current home and buy a new one to live in. A mortgage is a specialised loan given out to prospective buyers on contract, due to house prices being too high to buy outright.
Essentially, it means you have multiple mortgages at the same time. This is achieved by converting your existing mortgage into a let-to-buy mortgage and taking out a new residential mortgage on the new property. Let-to-buy mortgages are often interest-only and can be useful when it comes to easing the pressure if you have found yourself in a property chain.
If you take out a let-to-buy mortgage, you become defined as an accidental landlord, a status which brings with it many important considerations. Not only will you need to manage two mortgages or more at once, but you will also incur additional stamp duty by retaining your current residence.
Why should I consider let-to-buy instead of selling my current home?
Let-to-buy mortgages can take the time pressure off of you when you want to sell before buying a new home, allowing you to move in quicker, especially if you use the same lender! It also means you retain the existing home as a long-term investment. Let-to-buy may be a suitable option for you if any of the following statements apply.
- You are in a hurry to move and don’t have time to sell your home.
- You have struggled in the past to sell your home.
- You want to buy a property with a partner but also keep ownership of your current home.
- This move is temporary and you plan to move back at some point in the future.
Maximise your chance of approval with specialist advice from an expert in Let to Buy Mortgages
Are let-to-buy and buy-to-let mortgages different?
A Let-to-buy and buy-to-let mortgage sound similar and can easily be mistaken, but actually, they are very different.
A buy-to-let deal is intended for those who are specifically buying a buy-to-let property for rental income. A let-to-buy, on the other hand, is for those who did not intend to rent out their current property when they bought it, but are now doing so in order to purchase a second property. Homeowners generally convert an existing residential mortgage into a let-to-buy.
What are the criteria for a let-to-buy mortgage?
When switching to a let-to-buy mortgage, lenders will be assessing your eligibility with regard to several different factors. One of these will include how much rent you're expecting as an income.
Let-to-buy mortgages often have the following lending criteria:
- A maximum borrowing limit of 75-80%.
- Proof that the rent received will be higher than the mortgage payments. The rent should cover 145% of these if you are a higher-rate taxpayer, or 125% if you are on the basic rate. For example, if your monthly mortgage repayments are £500, your rental income should be a minimum of £750.
- Proof that you are buying a new home at the same time as converting to a let-to-buy. If you are not buying another property, then some lenders will still consider you by taking into account another onward plan, e.g., moving away for work.
- The same solicitor is to be used for both transactions.
Let-to-buy mortgage - FAQs.
Let to Buy Mortgage Calculator
Trusted let-to-buy mortgage advisors.
If you're looking to convert your existing mortgage to a let-to-buy, our specialist mortgage broker team can help you. We're residential mortgage experts and have helped clients in a range of circumstances let their current homes in order to move on to the next. Whether this is the first step in your property empire or you're looking to ease the pressure of a purchase chain, we can help you find the most appropriate deal for you. With plenty of useful advice, handy tips and tools, we'll ensure your mortgage application is in the best possible shape and safeguard your chances of success with let-to-buy.
Helping you convert.
Whether you're in a rush, feeling the pressure of a property chain, or just want to keep hold of your existing home, we can help you convert your mortgage to let to buy. Though the process can seem complicated, we're here to take the stress, worry and fear out of mortgage applications. Whatever your circumstances, whether you have an adverse credit history or a spotless slate, we're here to make your future plans a reality and help you begin your journey as a landlord.
