With the cost of renting a property increasing all the time and so many homeowners experiencing something of an uphill battle in terms of getting a decent price for their properties in the present marketplace, Let to Buy has become an attractive option for mortgage holders looking to move on to greener pastures. The main advantage offered by Let to Buy is that it enables the homeowner to purchase a new property without having to sell their current home or lose out on its present value by having to take a cut in price in exchange for a quick sale.
Instead of having to cover the cost of two mortgages, Let to Buy allows you to cover the cost of your first mortgage by renting it out. Of course, not everyone is prepared or equipped to be a full-time landlord, but you could use the services of a professional letting agency to solve this issue. This would be particularly advantageous if your move involved any degree of significant distance.
However, if you are considering Let to Buy then it is important to realize that some banks and other mortgage providers might only be happy to rent your original home out on a temporary basis. In this instance, Let to Buy would only be available as a short-term solution.
How It Works
When you take out a Let to Buy mortgage, your new lender will calculate how the amount you are entitled to borrow based on the rental income generated by your current property. Once the housing market picks up again, you should then be able to sell your home at a decent price, thus making a decent profit without losing out on your initial investment.
Unlike Buy to Let mortgages, Let to Buy products are typically much more generous in nature and, provided you have sufficient equity in your present home, you might find that you do not even need to raise a deposit in order to move.
Are There Any Disadvantages?
Although most people choosing the Let to Buy option are incredibly content with their decision to take this route, there are one or two obstacles that will need to be dealt with in order to ensure that everything ticks along as smoothly as possible. For a start, your new lender will need to make sure your existing mortgage provider has given you permission to let your current home on the rental market and you will also need to ensure your building and contents insurance policy is updated to take this into account. Additionally, those with leasehold properties will need to check whether there are any restrictions in place that could interfere with their plans of renting it out.
If you would like to find out more about the process of Let to Buy, or you need help finding a suitable mortgage product that will enable you to do this, then please get in touch with one of our helpful advisors today.
If you want to rent out your current property, as an alternative to having to sell, before you move to a new home then use our online Let-to-Buy Mortgage Repayment Calculator to help work out the costs.