Posted on 5 October 2015 by Jennifer
We want to buy a new house and do a let to buy deal to get equity from our current property quite quickly to secure a good deal on second property. We need advice and options please?I
In a let to Buy scenario, typically most lenders cap the borrowing on your current property at 75% of the value (though there are a few who do go higher), and the funds are then used towards the deposit on the new property. The loan can also sometimes be restricted by the level of rental income received, with lenders typically looking for the rent to be a minimum of 125% of the monthly payment at either the pay rate or a notional rate (say 5%).
At the same time we would then arrange a main residence mortgage for you on your new home. One of the real plus points of 'Let To Buy' is that we can choose from the whole of the mortgage for both mortgages, rather than one lender to do both.
Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.
We recommend you seek professional advice with regard to any of these topics where appropriate.