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What is Let to Buy?

It’s our job to get you into your dream home. But we understand that whether you’re employed or self-employed, if money is tight, that dream can seem very far away. Read this article to find out if Let to Buy is the solution to all your home problems.

What is Let to Buy?

This is pretty much a back to front Buy to Let type mortgage. You move out of your home, put it up for rent, and use that rent income to help buy your new, better home.

As simple as that is, there’s a lot of responsibility tied to a Let to Buy scheme. Keep reading to understand why people do this and how you could benefit from it to. If you’ve got aspirations to get your dream home, or problems with your current property, this could be your solution.

Why do people do this?

There are several reasons why someone would opt for a Let to Buy scenario, but most come down to time and money.

For some, it will take too long for the current home to be worth enough to sell. If you’ve got a growing family this could become a serious problem. When you absolutely need a new larger home, you might not have the time to wait for the current property to gain enough value. Let to Buy could be an option.

Not enough money: the cost of moving to a new home may be out of your budget, even if you sold your current home to help pay for it. By letting your property out, you can guarantee that you’ll have an income to help pay for your new mortgage.

Another incentive, is that through renting out your property, you could potentially be making back the money you would have got from selling the property, and more! All the while you can be living in your new dream home. This is possible through Let to Buy.

Invest money: through keeping your old home and renting it out, you’re ensuring that you have an investment in that old property that could grow as the value rises. This could be invaluable later on when you need to cash on that investment. By letting it out, you’re making sure the property remains well kept and in your possession for the future.

How does it work?

You change your current residential mortgage to a buy to let mortgage (essential if you’re renting it out) and then go through the mortgage process and buy your new family home.

First you’ll need to outline what you’d like to achieve, and what’s realistic from your properties. Will your current home be suitable for renting? Will you be able to afford the mortgage on the new home? Will it be easier for you to just wait a little while longer?

Work out all the details and make sure your plans are viable before starting to approach the lenders, starting with your current one. Speak to an adviser about all of this if you want to avoid the hassle and confusion.

There’s no doubt that handling 2 mortgages on your properties when you go through a let to buy process will be more stressful and complex than just the one. It’s best to get professional advice on how it will work for you and your circumstances. You might find that your current lender will happily change your residential mortgage to a buy to let mortgage, or it could be 10x more complicated… the best thing you can do is speak to an adviser.

Can I benefit from this?

Yes you could! Any type of mortgage is a huge commitment, but once you’re 100% certain that this is the way that you can afford your dream home and benefit from being a landlord, then you can start the mortgage application.

You can find our timeline guide for a simple, self-employed mortgage application here. But considering that you’ll be dealing with 2 mortgages at the same time as moving into your dream home and managing tenants… maybe it’s best that you get the help of me and my team.

 

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