Can we rent out our current home, and then buy another?
Posted on 3 April 2013 by Tina
My partner and I own a property outright, valued at approx £210,000. We would like to let this (using this money towards another purchase) and purchase another home for ourselves. Is there any way of using the value of our current property, to enable us to purchase a property worth approx £300,000 minimising our mortgage repayments (over a period of about ten years). I would be grateful of any advice. Many thanks.
What you are looking to do is called a 'Let to Buy', whereby you capital raise on your existing property (typically 75% LTV), which would then release equity to be used towards the purchase of your new home. Simultaneously we submit a new main residence application, with the choice of lender / product, based on the rest of your personal financial situation.
Many lenders are happy with this scenario, with the actual amount of the Let to Buy mortgage based mainly on the rental income your current home is likely to generate. The new main residence is then based on your affordability, though lenders all have a slightly different way of assessing the Let to Buy mortgage in the background.
I'd say it's worth having an initial discussion with one of our consultants to get a better idea of exactly what we can do to get you moving into your new home. If you'd like to do so, then please let me know and I'll arrange a convenient time to speak to one.
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