Let to Buy Mortgages??

2008nailah

Hi,

I am looking for advice on how this works?

My partner and I both have homes and are looking to sell one and rent one out, though we would need to use the equity in the rented property as part of the desposit.

Information greatly appreciated.

Thanks

Linda

ACG

You would be looking at a BTL mortgage on the property you are looking to sell then. The problem you may have is they only go upto 80% LTV, so it might not be viable?

Sorry after reading the post below, i noticed i mis read your actual post.

Below sounds correct in what he/she is saying. But not all companies will allow you to convert your mortgage to a Let to Buy and some may only do it for a certain length of time.

herbiesjp

Basically a Let To Buy mortgage is a normal residential mortgage based and agreed on your incomes.

You will need to find a lender happy with the let out property in the background (and the rental coverage they require) - but it is normally straightforward.

So you sell property 1

Remortgage property 2 onto a Buy To Let and raise deposit funds

New property bought via normal mortgage.

herbiesjp

ACG wrote: »

But not all companies will allow you to convert your mortgage to a Let to Buy and some may only do it for a certain length of time.

There is no conversion to a Let to Buy. There are no time limits on Let To Buys.

ACG

Convert was probably the wrong word. I should have gone with allow you to rent it out.
But i have heard some people do have time limits of 2 years...admittedly ive never seen it myself but for more than 1 person to say it, there must be an element of truth in it?

holly_hobby

I think ACG is getting confused with Consent To Let - whereby the consent of the lender is sought to let property on which they hold an existing residential mge ( effected when the individual purchased it as their private residence). Typically, such an arrangement may last up to 3 yrs, at which point, the lender will request that the mge be transferred to a BTL mge (if they offer them), or transferred to an alternative BTL provider. (assuming still let at that point in time)

Re the explanation re Let To Buy - you have it spot it, many (inc some advisors it has to be said) confuse a Let to Buy arrangement as actually being a Buy To Let arrangement - which in fact its the complete opposite as you rightly say !

Effecting a let to buy mortgage or arrangement, simply means that the lender aware of an existing property to be let, chooses to ignore the commitment and applies its normal affordability matrix on the residential property to be purchased, and for which the individual is seeking funding with themselves. (NB = some lenders in this market do want evidence that the existing lender has agreed to the letting, and proof that it is self sufficient regarding rental inc to mge commitment ratio.

Hope this helps

Holly

herbiesjp

If you are on a BTL there are no time limits.

There are no time limits applicable to any let to buy mortgages.