Following the passing away of my father I have inherited some money. I would like to move to a bigger house but keep my current home and rent it out as an investment for my retirement. A friend told me I can get a ‘let-to-buy’ mortgage but I’m not too sure how it works. Can you explain it please? I don’t want to be out of pocket.
In order to rent out your home, you will need to remortgage it onto a buy to let mortgage because most residential mortgage lenders do not permit tenants. The lender will need evidence that the rental income will cover the monthly mortgage payment, usually by at least 125%.
If your current home has sufficient equity in it, you can release some of the equity through the remortgage to put towards a deposit on the onward purchase (if your inheritance doesn’t cover it). You haven’t provided any figures, so I can’t tell you about your specific circumstances. Your best bet is to use a broker who has experience of the let to buy process. They will help you to calculate the costs. You can call us on 0845 345 6788, or send us an email.
1st January 0001