Let to Buy is a term which is often confused with Buy to Let. It is, as the name suggests the means by which you can let your current residential property to a tenant in order to purchase a new residential home to live in.
Structuring a deal like this is considerably more complicated than a more straight forward sale and purchase as both sides of the deal need to be carefully considered.
Firstly there is your current residential property which will be let. Will your current lender give you consent to let your current home? Do you need to release equity from this property in order to fund your new residential purchase? Are there Early Repayment Charges (ERC’s) on your current mortgage?
All of these questions need to be considered in order to work out the best and most cost effective way of structuring the two elements to the transaction.
Secondly we must consider the onwards residential purchase. In order to demonstrate you can afford your new purchase you will often need a lender that is happy to ignore the cost of the mortgage that will remain on your current home that will be let. Whilst common sense would say that mortgage will be paid by the rent that will be received a lot of lenders are not comfortable to assess things on that basis as they have no evidence of a track record of renting the property.
Fortunately at Domus Finance we have access to the whole of the market and we know exactly how each lender treats this situation and can quickly establish which lenders will offer you what you need on the most favourable terms.
Choosing let-to-buy has grown in popularity over the last decade or so as house prices and the equity in them increased and during that time we have developed a wealth of experience in structuring these deals for our clients.
If you want to know more why not give us a call or send us an email. Click the link to see how.