Non Standard Mortgages - Let To Buy
Other Points About Let To Buy
You can even let to buy if you do not have a deposit, assuming
that you have a reasonable amount of equity in your own
home. You can always remortgage your existing home to cover
your current mortgage, but also raise an additional sum
whilst you are at it, in order to put down as a deposit
on the new home you are buying.
Say you bought your house for £150,000 with a ninety percent
mortgage of £135,000. The value has since risen to £200,000
and you have reduced your mortgage debt to £100,000. Therefore
your equity has effectively risen from £15,000 to £100,000.
By using a let to buy mortgage, you can refinance the property,
release some of the capital, and use this money to fund
the deposit for the purchase of another property.
Under the terms of your existing mortgage, some lenders
will not allow you to let your original property commercially.
Other lenders may increase your interest rate slightly,
to bring it into line with other buy to let mortgages.
If you are prohibited from renting out your property with
your current lender, but are desperate to let to buy, you
can always remortgage your original property with a different
lender. Just check the finer details in the mortgage documentation
or speak to a financial adviser to make sure that you are
able to do this without penalty.
Before you let your home out, you should also tell your
buildings and contents insurer, as your existing policy
may not cover you for the perceived high risk of having
tenants live in your property. Again, avoidance of this
is not clever, as you could lose everything if the house
burns down and you find your policy has been invalidated.
