Let to Buy Mortgage

Heloha

Does anyone have any experience of let to buy mortgages?

I'm wanting to move in with my partner but bought in 2007 and don't want to sell my current home at a loss. My partner is a first time buyer. As I understand it, let to buy would enable me to let out my current home and then gain a new mortgage with my partner for a new home. However, I'm finding conflicting views on the Internet so would welcome any advice on the following:

- can you get both the let to buy mortgage and the new mortgage from the same provider?

- to gain a let to buy, does the provider need to be satisfied that the potential rental income on my existing house will cover the full mortgage payment each month or from some reports I've read, 125% of the interest only? I'm concerned that the potential rent might not entirely cover the full mortgage payment each month but I wouldn't have any problems financially if I had to top that up.

- does getting a let to buy potentially mean that I won't need a deposit for the new property?

- and just one more question! Do many banks offer this type of product? I've never seen them advertised and would like to stay with my current provider If i can.

Any guidance from anyone who has a let to buy would be really appreciated!

opinions4u

Heloha wrote: »

I'm wanting to move in with my partner but bought in 2007 and don't want to sell my current home at a loss.

Understandable, but at what point do you expect it to turn a profit? While the housing market appears to be stabilising it could be years before you see property values rise in any worthwhile way. During this time you could be incurring costs in maintaining a property.

- can you get both the let to buy mortgage and the new mortgage from the same provider?

Yes, but it depends on who the lender is. Personally I'd seek out the best buy-to-let deal and the best conventional mortgage deal I could, regardless of who the lender is.

- to gain a let to buy, does the provider need to be satisfied that the potential rental income on my existing house will cover the full mortgage payment each month or from some reports I've read, 125% of the interest only?

That is a typical criteria, but different lenders will have different rules.

I'm concerned that the potential rent might not entirely cover the full mortgage payment each month but I wouldn't have any problems financially if I had to top that up.

Maybe not, but if property values continued to fall (or didn't rise) and you're also taking a loss on the rent v mortgage cost, what's the point? You're basically betting on the property market recovering. Banks don't have the access to funding that they had 18 months ago, taxes and interest rates are likely to rise so disposable incomes will fall. This is a mixture that doesn't suggest you're going to see your house leap in value by 25% in the next 3 years because all the components dampen demand for borrowing or the supply of borrowing.

does getting a let to buy potentially mean that I won't need a deposit for the new property?

You will need a minimum of 10% deposit for the new property with most lenders. A bigger deposit will give you access to better rates.

and just one more question! Do many banks offer this type of product? I've never seen them advertised and would like to stay with my current provider If i can.

Any reason for your loyalty? Here's one major lender that does them, but check out the deposit required, rates charged and other conditions! I would see a whole of market mortgage adviser myself.

Any guidance from anyone who has a let to buy would be really appreciated!

For clarity, I have never owned on a buy-to-let basis. But if it was me, I'd be trying to sell up and raise a deposit for the new place (or live in the old one!!).

Good luck.