Most of us are familiar with ‘Buy-to-Let’, but less so with the opposite ‘Let-to-Buy’ practice. Letting out your own home, and raising a new let to buy mortgage against it, frees-up cash you need to be able to purchase a new home for yourself. A let to buy mortgage can be used by those who can’t sell their property, but is growing in popularity with those who don’t wish to part with their home because a work-based relocation takes them elsewhere for a limited timeframe.
A let to buy mortgage can offer many benefits to people such as locum GPs, junior doctors and relocating doctors who frequently have to move to where their work takes them, or they are uncertain where to put down their roots early on in their medical career.
The UK is currently experiencing high rental demand, and high rents can be yielded from tenants as a result. If house prices continue to strengthen, as the owner of two homes any let-to-buy candidate will also benefit from a double property price increase.
Not only can you offset your mortgage payments against your income tax bill, but you can also get a reduction in your capital gains tax bill when it comes to selling. Because your rental property has been your main home, even though it has become a let-to-buy residence, this allows you to qualify for the capital gains tax discount.
Before you decide if a let to buy mortgage is for you, it is a good idea to see if your home is attractive to tenants, and get a rental valuation so you are able to determine if your new mortgage interest costs will be met by rent payments. Give consideration to stamp duty costs and the legal charges involved in any mortgage application, as these can be substantial depending on the size of property you are looking purchase.
Getting any mortgage these days is a lot harder than it may have been when you took out a mortgage on your existing home. Since the Mortgage Market Review came into play, affordability checks can throw up lots of questions and many hours of time can be spent meeting with your bank’s mortgage adviser. Many direct lenders shy away from let to buy mortgages due to the extra hoops they have to jump through to get to the end result. A specialised and experienced mortgage broker such a Doctors Mortgage Online can help you get a medical let-to-buy mortgage without the need for a face-to-face meeting. Get in touch to see how we can cater for your individual mortgage requirements.