There’s also the issue of second property stamp duty, which you’ll find more details about later in this guide. It’s worth noting that let-to-buy mortgage deals usually don’t have the same interest rates as other mortgages. Consequently, you could end up losing money. What’s more, if you need to sell one or both properties quickly one day, there’s no guarantee either will have gone up in value. You’ll need to rent out your old home immediately or risk money from your savings or income going straight to your mortgage lender. Namely, it’ll mean you have not 1 but 2 sets of mortgage repayments to meet every month. Downsides of let-to-buy mortgagesĪs with any type of mortgage, a let-to-buy has disadvantages. In the meantime, you can still buy another house and move in. If property prices have fallen, applying for a let-to-buy mortgage will allow you to wait to sell your first property when the market bounces back. You can let out your home and then buy a new one to live in for the duration of your job contract.Īnother reason you may want to hold on to your original home a little bit longer is the housing market. It might additionally be an attractive option if you have a new job elsewhere in the country, which you know will only last for a few years. ![]() You could both move into one and rent out the other, giving you a safety net in case, later down the line, you decide to live separately again. Let-to-buy mortgages are a popular option for couples or friends who both own properties but don’t want to sell either of them. You can hold off until an excellent offer is submitted and ensure you get what your home is worth. It can take a lot of pressure off being in a property chain as you won’t need to rush to find a buyer. One of the most significant benefits of a let-to-buy mortgage is that you’ll be able to buy a property you love without having to sell your current home. The rent money you make from your old place will help pay off your mortgages for both properties. At the same time, you’ll move into your new home with a standard mortgage (from the same lender). Your initial property will be remortgaged with a buy-to-let mortgage and put on the rental market. Put simply, instead of selling one property and buying another, you’ll be able to keep both with a let-to-buy mortgage. Your original property will then be rented out to paying tenants. ![]() With a let-to-buy deal, you can use your equity to put down a deposit on a new house. For example, if your house is worth £250,000 and your mortgage is worth £150,000, your equity is £100,000. By equity, we mean the proportion of the house you actually own. How does let-to-buy work?įor a let-to-buy mortgage, you’ll remortgage your current home and release some of its equity. You’ll rent out your original property and use your new one as your primary residence. This sort of mortgage involves having 2 mortgages – a buy-to-let mortgage and a standard residential mortgage. Not to be confused with a buy-to-let mortgage, a let-to-buy is an ideal solution if you’re struggling to find a buyer for your home and are in a hurry to move. That’s all down to something called a let-to-buy mortgage. It might be possible to secure your new property without having to rely on selling your existing one. Congratulations! If you’ve yet to find a buyer for your current home, there’s no need to despair just yet. ![]() So, you’ve found your dream house and had an offer accepted.
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