Let to Buy Mortgages

Let to Buy Mortgages & Buy to Let Mortgages

How does Let to Buy work?

If you want to move house but you are struggling to sell your current home or your property has dropped in value, Let to Buy is something you may want to consider. Letting out your property could allow you to move into a new home without feeling pressure to sell in a rush and potentially at a loss.

If you own enough of the equity in your property, you could remortgage and release some cash to put down a deposit on a new home. You would then let out your existing property and use the rental income to cover the cost of the mortgage. This in turn will free you up to take out a mortgage for a new home and cover the repayments with your salary or other sources of income.

Mortgages if you want to Let to buy

Although some lenders will allow you to let out your home on a residential mortgage, this will normally only be on a temporary basis. So unless you are only going to be letting it out for a short time, it is likely you will need a Buy to Let mortgage.

Buy to Let mortgages are similar to residential loans, but there are some differences which our expert Advisers will be happy to talk you through.

Lenders will also want to see evidence that your rental income will comfortably cover your mortgage repayments. Being a landlord is not right for everyone, and entering into a Let to Buy arrangement should not be taken lightly. But if you are confident that you will get a decent rental income and can manage the responsibilities of letting out a property, this is a very worthwhile option. 

Let to Buy can be an option for those who want to purchase a new home whilst keeping hold of their current property and letting it out. As someone looking to buy a new property, it can allow you to release some equity from your current home and put it down as a deposit on your new one.

Let to Buy is also a popular choice for couples who move in together later in life, perhaps once they both already have their own properties. In this case, you might both move into one of the properties and rent the other one out on a Let to Buy mortgage.


What is the lending criteria for Let to Buy?

Like all mortgage types, whether you are choosing a let to buy mortgage for the first time, or refinancing with one, there’s a strict set of criteria to meet in order to be approved.
Many lenders differ, but here’s a standard list on what they may require:
• Minimum age: 25 (for most lenders)
• Maximum age: 75
• A large deposit (or equity), usually around 25%
• Monthly rental income of at least 125% of the mortgage interest
• Good credit rating
• To pass the individual lender’s affordability assessment
• Have net disposable and allowable income

What’s the difference between Let to Buy and Buy to Let?

Let to Buy and Buy to Let are both mortgages for those looking to let out a property, but work slightly differently. Buy to Let mortgages are for those looking to buy a property to let out, or remortgage one that is currently let.

Let to Buy differs in the sense that it usually means you are living in the property that you wish to let out then move somewhere else. So, you remortgage to a Let to Buy in order to release equity from your current property and provide the deposit for a new residential property. If you subsequently remortgage this property further down the line it would be treated as a normal Buy to Let remortgage as it is currently let out.
Please call us today on 0117 325 1511, for a free consultation with one of our expert Mortgage Advisers to discuss all the options we can offer regarding Loans and Mortgages.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER DEBT SECURED ON IT.

THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE SOME ASPECTS OF BUY TO LET MORTGAGES
For information and advice on Let to Buy Mortgages

Call Bristol Mortgages Online on 0117 325 1511

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