Let to buy mortgage

stevetuk

Hi

I'm wondering if anyone has any information/advice about let to buy? I have a mortgage on a property I currently live in but want to relocate on a temporary basis (say max 5-10 years) and then move back. I'd ideally like to rent out my current property and buy a new one. I have no capital available to use as a deposit to buy a 2nd property: is it possibe to release equity on the first one to put down as a deposit on the 2nd, with a 'let to buy' mortgage arrangement? How does all of this work? Or, is there no alternative but to sell and buy in the new location?

Also, if I have outstanding balances on credit cards (0% interest after balance transfers) and a car finance arrangement, will these impact on everything? I remortgaged with the same lender without any additional checks like I went through first time around.

What sorts of questions is the lender likely to ask about my let to buy plans or plans to relocate? Any advice on what position I need to get myself into would be much appreciated!

Steve

tightasagnats

You would face all the checks as this would be a new mortgage product.

I believe that LTB mortgage would release up to 65% of the equity that can be used as a deposit but the rent on "let" property would have to cover the new (BTL) mortgage repayments, and your income would need to cover the remaining mortgage on "lived in" property i.e. anything over the deposit amount.

Get a broker. They'll make sure you're getting everything in order and will know the market and will also let you know if you're out of your depth and likely to be refused.

kingstreet

3% stamp duty surcharge on the second purchase from 01/04/2016!

amnblog

kingstreet wrote: »

3% stamp duty surcharge on the second purchase from 01/04/2016!

Thanks George!

amnblog

Let to Buy has a number of complications for lender and your best option is to engage a broker.


For example some Lender's will take the mortgage payments on the let property into account but not the rental payment, killing your affordability calculation.


Others wont let the loan to value on the let property exceed that on the new purchase.