A let-to-buy mortgage works by allowing you to borrow money to buy a new home to move into, whilst your existing residence is let out to tenants. The mortgage on your existing property is moved to a buy-to-let mortgage, allowing you to take a residential mortgage on your new property. There are many reasons why a let to buy property might be an option for you, the most common being timescale. Maybe you have found your ideal home and are not able to wait until you sell your existing property or you can’t sell your property for the price you are looking for in the time required.
Alternatively, you may prefer not to sell your property as you believe it will be a good long-term investment and instead choose to let the property to cover the mortgage repayments. By changing the use of a property from residential, the property you’re currently living in, to a buy-to-let, the property you want to let out, you will need to change your existing mortgage to a buy-to-let mortgage, in addition to securing a residential mortgage on the new home that you will live in.
It’s important to note that you cannot live in a property that has a buy-to-let mortgage against it and you cannot rent out a property that has a residential mortgage against it without the lender’s prior consent.
However, by using this approach, you are not only able to take out a mortgage for your new home but also, do not significantly increase your existing monthly repayments. In addition, you’ll be earning rent from the existing property whilst being able to purchase another.
This could mean you can move the chain process on if selling your property is proving more difficult than anticipated.
And you can keep your current property as a long-term investment whilst the mortgage is paid by rental income from your tenants.
Whether you're a first-time homebuyer, looking to refinance your existing mortgage, looking for lending options for your business, or needing help finding the right insurance coverage, we've got you covered. Contact us today to schedule a consultation and take the first step towards achieving your financial goals.
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