Let To Buy

MORTGAGE

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Let to Buy Mortgages

If you’re looking to build a portfolio, a let to buy can prove to be a useful place to start as you can utilise your current asset. It allows homeowners to rent out their property and buy a new residential property. It also allows you to earn an extra source of income and gives you the option to sell the property on later.

If you have found your dream home and can’t wait for the whole process of selling your current property, it’s a great option for you to get the ball rolling quickly and efficiently and Pinnacle can help you with the whole process from start to finish.

Why should you consider a Let to Buy mortgage?

There are several reasons you should consider a let to buy.  A common reason is you’d like to use the equity you have built up in your current home to help you move to a new one, whilst keeping your current home.  You may have time constraints and need to utilise your equity sooner in order to retain your onward purchase.  Or it could simply be that the property market has made it difficult for you to sell your current home.  Whatever your reason we can discuss the available options.

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What’s The Difference Between Buy to Let and Let to Buy?

They both sound very similar, but they are subtly different.  A buy to let you are buying the property for the purpose of renting it out, however with a let to buy you are purchasing an onward property to live in, to then rent out your current property.

What is the criteria for a Let to Buy?

One of the main factors on switching to a let to buy mortgage is based on how much rental income you will be able to generate from the property you are renting out, not how much money you earn.

You will generally be required to meet certain criteria, such as not exceeding a borrowing limit that is 75%-80% of the value of your current property.  Typically, you would be required to demonstrate a substantial rental income above the mortgage cost and be able to show you are buying a new property at the same time of switching your mortgage.  These are not necessarily prerequisites but in the majority of cases this would be true.  Of course, there are exceptions to these rules, such as moving away for work, and these would be considered on application.

A let to buy mortgage is often arranged in conjunction with your new/onward residential mortgage, which can add a degree of complexity to the process. Naturally we are on hand to assist all the way.

What are The Criteria for a Let to Buy?

One of the main factors on switching to a let to buy mortgage is based on how much rental income you will be able to generate from the property you are renting out, not how much money you earn.

You will generally be required to meet certain criteria, such as not exceeding a borrowing limit that is 75%-80% of the value of your current property.  Typically you would be required to demonstrate a substantial rental income above the mortgage cost and be able to show you are buying a new property at the same time of switching your mortgage.  These are not necessarily prerequisites but in the majority of cases this would be true.  Of course, there are exceptions to these rules, such as moving away for work, and these would be considered on application.

A let to buy mortgage is often arranged in conjunction with your new/onward residential mortgage, which can add a degree of complexity to the process. Naturally we are on hand to assist all the way.

Are There Alternatives to Let to Buy?

This depends on your intentions with regards to the property purchase.  Are you looking to sell as soon as possible?  Can you plan for the property over 0-2 years, and 2-5 years?  In some cases you may be looking at a 0-1 year plan and in short term scenarios such as this it may be worth considering bridging finance as a more appropriate option (hyperlink!!!)

Whatever the need Pinnacle can help you to understand the best options are available to you.

Our highly experienced team of mortgage brokers are on hand to help you through the whole process from start to finish. Call Pinnacle today to begin your journey.