Let To Buy Mortgage
Why Does A Let To Buy Mortgage Suit First Time Investors?
A let to buy mortgage can be a good first step for someone who is new to property investment. That's because in many ways a let to buy mortgage minimises the risks of investing in a new property. Let to buy reverses the traditional BTL mortgage route by having investors rent out their existing home to buy a new one.
There are many reasons why it might seem to make sense. In some cases, people want to fund the move to a newer, larger property but are unable to sell their original home. This type of mortgage allows them to let out their home and fulfil their dream of changing residence and it offers several advantages as well.
With a let to buy mortgage, just as with a BTL mortgage, it is essential to know the area in which your tenants will be renting. This will enable you to have an idea of rental values and other amenities that tenants might be looking for. With an LTB mortgage, letting your existing home means that you will know the area inside out and will be able to talk to prospective tenants at length about schools, transport, wine bars, restaurants, shops and other amenities they might be looking for.
The LTB Advantage
One of the danger areas for new investors is getting landed with a lemon of a property. That's a property that needs more investment than had been anticipated or a property that is difficult or impossible to let. Getting a let to buy mortgage on your own home means that you will know the area and you will know the property inside out, especially if you have owned it for several years. You will know exactly what needs to be fixed and you will probably have kept it in good condition if it is your main residence.
So, how does a first time investor get hold of a let to buy mortgage? This is easier than you think as the scheme has been around for a long time. In the dismal financial days of the early 1990s, many people went for a let to buy mortgage as it was the only way to move house in a depressed property market. This means that there is plenty of choice when it comes to mortgage deals. Some lenders even offer a 100 per cent let to buy mortgage, making it very easy for the new investor. And investors can fund the deposit on their new home by releasing the equity in their old home. Best of all, they retain the old home, which continues to appreciate in value.
As with any mortgage, it is worth shopping around for a good deal. New investors would be well advised to get advice from a professional broker, to be sure that they get the right let to buy mortgage for their needs.
