What is Let To buy?
If you have enough equity in your current home, you can remortgage and release equity to put down a deposit on a new home. You then let out your current home and use the rental income to cover the mortgage payments on your existing home. This will then allow you to obtain a mortgage for a new home and mean you won’t have to sell your existing property.
This can be an option
- If you want to keep your current property as an investment.
- If you can’t sell you existing property and want to rent it out for a period of time until it’s a better time to sell.
- For couples who both own a property and want to raise funds to buy a property together.
If you are buying you second property you will have to pay an additional 3% stamp duty on your purchase.
If you sell your exiting property (previous main residence) within 36 months, the additional 3% stamp duty can be refunded by HMRC.
Lenders will normally need a rent assessment for your existing property and with will have to be with a A.R.L.A registered estate agent.
You will normally need to leave at least 25% deposit in your existing property and the rental income will have to support the borrowing amount.
Other option to rent your existing property.
If you are unable to sell your property and need to move but don’t require any additional funds for a deposit for your purchase, you can ask your existing lender for a consent to let, giving you permission to rent out the property. Lenders have different charges for this such as a one of payment, an increase in the interest rate or a set period of time you can rent the property out. *Please note if you rent your existing property without consent of your current lender you would be in breach of your residential mortgage conditions.