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Let to Buy and onward purchase
cool_techie
Posts: 100 Forumite
Hi All,
Hoping to get some advice here.
I and my partner are planning to convert our current home from a residential mortgage to a Buy to Let and release the equity to use as a deposit for an onward purchase.
We have enough equity in the property, to release funds for our onward purchase and can afford the additional stamp duty as well.
Our vendors for the onward purchase are buying a new build, which means they are subject to a 28-day exchange by their builder.
As a result, the estate agents have asked us to exchange contracts for our onward purchase within 28 days, to enable the vendors to make their new build purchase. This would possibly be done with 10% deposit from our side.
This means, our Residential to Buy-To-Let conversion on our current home also needs to down within 28 days and the solicitors would have to guarantee the Buy-To-Let lender about the onward purchase going ahead.
My questions are:
1. Does this mean, using a same solicitor to handle conveyancing of both our transactions?
2. Would solicitors be retaining part of the deposit amount being unlocked from the Buy-To-Let mortgage, following exchange and through to completion.
3. What would happen to the Buy-To-Let mortgage (and the funds released), if the Onward purchase falls through for any reason?
Thanks & Regards,
CT
Hoping to get some advice here.
I and my partner are planning to convert our current home from a residential mortgage to a Buy to Let and release the equity to use as a deposit for an onward purchase.
We have enough equity in the property, to release funds for our onward purchase and can afford the additional stamp duty as well.
Our vendors for the onward purchase are buying a new build, which means they are subject to a 28-day exchange by their builder.
As a result, the estate agents have asked us to exchange contracts for our onward purchase within 28 days, to enable the vendors to make their new build purchase. This would possibly be done with 10% deposit from our side.
This means, our Residential to Buy-To-Let conversion on our current home also needs to down within 28 days and the solicitors would have to guarantee the Buy-To-Let lender about the onward purchase going ahead.
My questions are:
1. Does this mean, using a same solicitor to handle conveyancing of both our transactions?
2. Would solicitors be retaining part of the deposit amount being unlocked from the Buy-To-Let mortgage, following exchange and through to completion.
3. What would happen to the Buy-To-Let mortgage (and the funds released), if the Onward purchase falls through for any reason?
Thanks & Regards,
CT
12.71kW PV system - 33 panels of JA solar JAM60S20-385/MR facing S-E(18) / N-W (15) with Growatt SPH-6000 and Growatt MIN 6000TL-X inverters, 4 ML33RTA 3.3kWh batteries, Shinephone monitor app and Solar iBoost+. All in the historic, grand old city of Milton Keynes.
3.84kW PV system - 16 panels of Sharp ND-R240A2 facing SE with SMA 4000TL inverter, Geo II monitor and Solar iBoost. All in the historic, grand old city of Milton Keynes.
3.84kW PV system - 16 panels of Sharp ND-R240A2 facing SE with SMA 4000TL inverter, Geo II monitor and Solar iBoost. All in the historic, grand old city of Milton Keynes.
0
Comments
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1) Yes that’s the best way.
2) There will be no money release at exchange, only when you complete on the new BTL Mortgage, which would typically be the same day you complete on the onward purchase.
3) The 10% deposit would need to come from your saving/ money put aside for stampduty etc. This can be replaced when the BTL completes and money is released ( the same day you complete on your onward purchase).0 -
Typhoon2000 wrote: »3) The 10% deposit would need to come from your saving/ money put aside for stampduty etc. This can be replaced when the BTL completes and money is released ( the same day you complete on your onward purchase).
Wouldn't the above be irrelevant, due to the following:Typhoon2000 wrote: »2) There will be no money release at exchange, only when you complete on the new BTL Mortgage, which would typically be the same day you complete on the onward purchase.12.71kW PV system - 33 panels of JA solar JAM60S20-385/MR facing S-E(18) / N-W (15) with Growatt SPH-6000 and Growatt MIN 6000TL-X inverters, 4 ML33RTA 3.3kWh batteries, Shinephone monitor app and Solar iBoost+. All in the historic, grand old city of Milton Keynes.
3.84kW PV system - 16 panels of Sharp ND-R240A2 facing SE with SMA 4000TL inverter, Geo II monitor and Solar iBoost. All in the historic, grand old city of Milton Keynes.0 -
Yes if the ownwards purchase falls through, you will need to remain in your old house and you cant do that with a BTL mortgage. That’s why both Let to Buy and new residential need to complete on the same day.
To exchange on your new place, your 10% deposit has to come from elsewhere.0
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