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Changing a Mortgage to Buy to Let

The transition from a residential mortgage to a buy-to-let mortgage is quite typical. There are a variety of situations that could justify a mortgage switch for example, moving house or having a vacant house with an existing residential mortgage.

If you own an existing residential mortgage, but wish to convert to a buy-to-let the process will require approval by your mortgage lender. If the lender you currently have declines the remortgage option, it could be an option for you with a new lender. The penalties for early repayments, based on the term of your mortgage.

The decision of switching to a buy to let mortgage is based on:

The type of mortgage you currently have
What do you intend in relation to the property
Your future arrangements for living
Other mortgages you may have
The terms of your current mortgage
Lender consent

How do you change your mortgage to buy to let

Since it’s a financial issue the decision to switch mortgage types requires care and consideration. It’s not something you should be done in a hurry. Consult a professional advisor in case you’re not sure. Our experts are available to answer questions at any time and verify whether you’re eligible.

A buy-to-let mortgage is distinct from a traditional mortgage. It is possible to increase the income you earn from renting, for instance in a situation where it would not be an possibility. Our experts can immediately look up the you can be eligible for and go over the different aspects with you.

If you only switch your mortgage to the existing lender, then you’ll be presented with the rates they offer. In this way, you’ll be limited to one lender. In the end, you’ll not have the luxury of selecting the loan you’re qualified to get. Our advisers have access to all UK lender, which means you’re certain to find the lowest rate possible.

Purchase a new house and converting your current home to a buy-to-let

The process of changing a residential mortgage to a buy-to- let and then buying the new house is popular. These types of mortgages are known as lease to purchase mortgages. Instead of selling your existing home, you could lease it out.

It is also possible to remortgage your current home to finance the purchase of the new house. The rental income you earn could be used to pay for the new mortgage for residential properties Now we’ve made you think…

You may have paid more than you owe for your current home and you’ve tried selling but are unable to sell at the amount you think that it is worth. The best alternative is to put the house on the market and then switch to a buy to let mortgage and hold off until the value grows enough to justify selling.

Many lenders won’t agree to this type of arrangement. It is because of the magnitude of risk lenders take on. If a tenant fails to pay rent, or you’ve got an unexpectedly large repair bill for the rental, this can create financial pressure. If you’re in a bind for alternatives, you might think about a bridging loan however, be cautious and use it only as the last option.

The purchase of a Buy to Let mortgage and then moving to a rented home

If you are currently a homeowner with an existing residential mortgage, but you want to leave and lease a house instead there are lenders that are available. But there are lenders who will not be thrilled to offer a switch. This is due to the fact that buy-to- let mortgages are typically provided to existing homeowners with at the very least a residential mortgage.

Rents can be more expensive than a mortgage and in the event that your tenant fails in paying rent there could be financial difficulties. Creditors are aware of this risks, and therefore they may reduce the amount of rent you pay.

Finding the most affordable mortgage rate when you switch

A good rate on your mortgage is essential in the event of switching mortgages. If you’re already enjoying an outstanding rate, making an application to your lender for approval is a good option. Your lender could be willing to simply transfer the mortgage rate to a different property.

If your lender doesn’t accept talk to an advisor to determine the mortgages and rates you’re qualified for. It’s worth checking to find out the rates you’re eligible for even if the lender does provide consent.

A good advisor will try their best to ensure that you are able to keep the current rate, particularly when rates are more expensive.

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