Let to buy mortgages

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Let to buy re-mortgages were originally designed as a solution to negative equity, but with the huge increase in house prices, letting to buy has more commonly become motivated by a wish to retain property for investment purposes.

A let to buy involves purchasing a new residential property whilst letting out your current home to tenants. This is usually achieved by re-mortgaging on a Buy to let Basis to fund the deposit of the new residential purchase .

The remortgage part of a let to buy mortgage will usually be based on the potential rental income of the property, rather than your personal income, so keeping the property will not necessarily impair your ability to buy a new home.

Here are 2 possible advantages of a let to buy:

• By letting out your current property you keep hold of one of your biggest financial assets. And if the cost of the mortgage on a repayment basis is always being covered by the rent, this could offer excellent returns over the long term.

• By purchasing a new property without having to sell your current property, you avoid the problems associated with bigger chains. This can make securing the new purchase that much easier.

The possible risk factors of a let to buy:

• If you cannot find suitable tenants for your property you will be liable for both of the monthly payments. This could make affordability difficult.

• If property values decrease substantially, so that the value of your property is lower than the mortgage you owe, you could be left in a negative equity situation.

Although arranging Let to buy finance is often possible, finding the most competitive solution can be a complicated task. Contact us today and we will review your situation and provide advice as to the viability of a Let to buy.

NOTE that Buy to Let Mortgages are NOT regulated by the Financial Services Authority