Let to Buy mortgage?

[Deleted User]

Anyone know anything about these?

Wife has been going on about a scheme where you rent out the house you currrently live in (and keep the mortgage), and then get one of these let to buy mortgages to buy a new house to move to?

Apparently, as long as you get permission off your first lender and the rental income is OK, they'll lend you to buy your 2nd house. Sort of like Buy to Let but slightly different.

Just wondered how feasible these are and what sort of deals are available?

holly_hobby

Your wife understands correctly ..

Let to buy mortgage - is where you intend to leave your main residence, and purchase a 2nd property (on which you require the mortgage to be applied for ), the new property to become your new main residence.

Existing property

- you will need your current lenders consent to let - they may increase the mortgage rate you are in.
- you will need to declare the rental income derived from the property to HMRC (as part of self assessment if you don't want to employ an accountant)
- the tax due from the rental income can be mitigated by costs associated with the property being rented i. mortgage interest, maintenance costs etc
- advise getting the letting managed by an ARLA letting agent
- or ensure if managing yourself, that you have the tenant sign an AST (assured shorthold tenancy agreement)
- on the sale of the property there will be capital gains tax (CGT) which may be offsett by available annual personal allowances at the time of disposal, plus a reduction in respect of your previous owner occupier status.

I spoke about this the other day on another thread - I had the same situation - and approached Intelligent Finance- they did not take into account anything to do with my exis property (mge or rental income), and were happy to lend as long as I passed the normal status and affordability checks (which I did).

Now, this was a couple of yrs or so ago, and since then the market has changed - so you may only be able to svc your new mge reqirements by a Let to Buy mortgage, but may be worth a phone call to your existing lender, bank etc to see whether they would be happy to accept such business. If not, just go for a straight LTB mge - a good whole of market broker will be able to assist.

Hope this helps

Holly