Let To Buy Mortgages
Four Reasons To Keep Your House And Utilise Let To Buy Mortgages
Let to buy mortgages are a reversal of the now popular buy to let mortgages. With buy to let mortgages, people buy a property with the intention of letting it out. Let to buy mortgages turn that process on its head. Instead of buying a new property to let out, you can let out your existing property and move into a different one. Here are four reasons to consider let to buy mortgages.
Let to buy mortgages work well in cases where people like their existing home, but need to move for some reason. After all, if you have lived in a home for a long time and have spent years getting it right, you may not want to get rid of it even if it doesn't suit your needs at the moment. Let to buy mortgages offer a solution to this dilemma, enabling you to keep your existing property as an asset while moving to somewhere else.
Another reason for having let-to-buy mortgages is related to the first. So many people have to move for work, but may not want to give up their homes. You may have spent a long time getting a home in the right catchment area for the schools you have chosen for your children (even if they are not quite ready for school yet). Having to move could mean starting that process all over again. Many people choose let to buy mortgages so that they can hold on to their existing home and lives, while making a temporary move away.
Downsize With Let to Buy
A third reason for investing in let to buy mortgages is to downsize without losing your existing property. If your children have left home and your house feels too big for you, yet you can't bring yourself to part with it entirely, then L2B mortgages offer a good compromise. You can let out your home, move to somewhere smaller and still have the possibility of returning to your old home or passing it on to a family member.
Getting additional income is a fourth reason why people often get LTB mortgages. This can be a first step into buy to let, with new landlords having the safety net of letting a property they know inside out. Many people go on from their initial let to buy mortgage to plunge fully into the world of buy to let. Let to buy mortgages can be the first step in building an extensive property portfolio.
One advantage of let to buy mortgages is that you may need lower deposits than with the buy to let equivalent. Some let to buy mortgages are available at 90 per cent loan to value, compared with the 75 to 85 per cent loan to value ratio that is typical with BTL. Apart from that, let to buy mortgages are very similar to buy to let mortgages. Most lenders will look to see that the rental income is 125 per cent of the interest payments, making sure that any left over funds are enough to cover refurbishment and property management. Once that is assured, it's time to make the move into let to buy mortgages.
