What is Buy To Let Mortgage ?
A buy-to-let mortgage is a loan that allows an investor to purchase property in the private rental sector with the intention of renting it out to renters.
So here’s a scenario: you’ve brought your property and rented out for several years and you’ve joined the rental income. So your strategy may be that you’ve bought it and you intend to rent it out and then, later on, you intend to sell it and get the profits from there. So your buy to let mortgage must be fully paid back at the end of the term.
So what do you do?
Here are some options for you to consider.
Firstly, do not leave it to the last minute.
So this will be considered your Refinancing Option. Some lenders will lend, well, into the 80s so people that go well into their 80s, some lenders will lend because they will base their calculations on the rental income that comes from that property.
Another option is Children or Younger Spouse Options. So you could have your children that are eligible or younger sponsors eligible on the mortgage, but you have to bear in mind that they will lose the first-time buyer advantage and any options that may be open to them as a first-time buyer. Let’s consider the option of selling up or buying and selling.
There’s the obvious option of just Selling The Property at the end of the loan and paying off the loan so you sell the property and the proceeds you use to pay off the loan.
And the other option. Some Savvy Investors will buy double the amount of properties in the first place. They will sell half of their properties off and the half that they sell-off. They’ll use that to pay off the loan on the other half of the property. Then they will own half the properties outright and to be able to get cash flow every month from those properties.
Summary
All of the options I have mentioned to you have their own details and fine print. I would suggest you seek the advice of an experienced property consultant like ourselves. Doing nothing when it comes to the end of your buy to let mortgage is a recipe for disaster so I would not recommend you leave it to the last minute. Start early, start the process early and consider your exit strategy so that you know what you’re going to be doing at the end of the mortgage. Remember, we buy single units and portfolios, we help quality release and also refinancing.
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