Let-to-buy mortgages can help you buy your next house when you haven’t got a buyer for your existing home.
Of course, the ideal situation would be that you sell your property quickly, find your dream home and move in with no problem whatsoever. But sadly, in the property industry, not everything goes to plan every time. It may be that you’re struggling to find the right buyer, that you’ve already found your dream home and don’t want to risk losing it or you want to move in with your partner but both own property…
Whatever the case, one option that you have is to let out your current property and take out a new ‘let-to-buy’ mortgage in order to purchase your new home.
To let, or not to let…
As with all major life decisions, it’s important that you weigh up the pros and cons before plunging in to the deep end. Our Mortgage Advisors Mark Coleman and Mark Lyness can offer you independent advice on your own personal circumstances; but in the meantime, we’ll try and give you a generic overview of the pros and cons…
Pros
- Not having to wait for a buyer relieves the stress and pressure that would otherwise be put on you to sell quickly
- Puts you in a favourable position as a buyer. You will have no reliance on a buyer on your own property, which is very appealing to sellers.
- You will have two investments or ‘nest eggs’ for you or your family’s future
- Depending on various factors such as mortgage rates, repayments and rental value, you may end up with an additional income
Cons
- You will be responsible for two mortgages. This can be worrying for some people.
- There is a Stamp Duty surcharge of 3% (on top of the Stamp Duty band) for second properties. However, if you decide to sell your first home within 36 months of completing on your purchase, HMRC will make a full refund
- Because of the increased risk to lenders, let-to-buy rates are not as good as standard residential mortgages