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Let To Buy mortgage?
ProDave
Posts: 3,785 Forumite
I am wondering if a Let To Buy mortgage might help me?
My situation. We still own our previous house. It is let to a tenant who says they want to buy it,. However they have twice now put back the time when they think they will be able to buy it.
We are building a new self build. This has been financed entirely with savings (proceeds of selling previous buy to let properties)
Neither property has any mortgage.
Because the sale of the old house has been delayed, we have run out of money and can't finish the new build house.
We can't get a self build mortgage on the new house as most lenders expect to be involved from the start and won't take on a part built property.
We can't get a buy to let mortgage on the old house as another factor is it was a former B&B and the tenant is still running it as a B&B so would fall foul of the no business use that most BTL mortgages have.
So what about Let To Buy mortgage? That seems to be aimed at releasing capital from your former home if you can't sell it and let it instead, to enable you to buy a new property.
However all the discussions I can see about let to buy mortgages assume you will then have 2 mortgages. But we don't need a mortgage on the new house.
We only need to borrow £25K to finish the new build, against the security of the old house valued at £300K with currently no mortgage on either property.
My situation. We still own our previous house. It is let to a tenant who says they want to buy it,. However they have twice now put back the time when they think they will be able to buy it.
We are building a new self build. This has been financed entirely with savings (proceeds of selling previous buy to let properties)
Neither property has any mortgage.
Because the sale of the old house has been delayed, we have run out of money and can't finish the new build house.
We can't get a self build mortgage on the new house as most lenders expect to be involved from the start and won't take on a part built property.
We can't get a buy to let mortgage on the old house as another factor is it was a former B&B and the tenant is still running it as a B&B so would fall foul of the no business use that most BTL mortgages have.
So what about Let To Buy mortgage? That seems to be aimed at releasing capital from your former home if you can't sell it and let it instead, to enable you to buy a new property.
However all the discussions I can see about let to buy mortgages assume you will then have 2 mortgages. But we don't need a mortgage on the new house.
We only need to borrow £25K to finish the new build, against the security of the old house valued at £300K with currently no mortgage on either property.
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Comments
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We only need to borrow £25K to finish the new build
That's surely well within personal loan territory even if you have to pay high interest rates since you'll be saving on all those valuation and arrangement fees if you went down the mortgage route.Signature on holiday for two weeks0 -
I might be able to do it with a presonal loan, but the interest is higher and the term shorter, so the payments are higher.
What I am really looking for is an interest only loan as low rate as I can find and pay the whole lot back when the house sells, or in 4 years time when I have other funds due that would covert the whole loan.
So a let to buy mortgage over the longest period they would give would keep the payments down.
I do need to compare costs and any early redemption charge as you may well be right, it might be cheaper to avoid all the costs and just have a personal loan at a higher interest rate.0 -
A BTL remortgage and a let to buy are exactly the same. If you can't do one, you won't be able to do the other.
It's the commercial element of the proposition which is causing the issue.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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