Changing to a Buy to Let from Residential Mortgage, Explained

Changing to a Buy to Let from Residential Mortgage, Explained

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If you’re reading this, it’s most likely because you want to know if you’re able to change a residential mortgage to a buy to let mortgage. There might be several reasons why one would want to change from a residential mortgage to a buy-to-let. 

This article will examine all the reasons why switching from a residential to a buy to let mortgage is necessary. We will also look at when and how you can change from a residential mortgage to a buy-to-let mortgage. As mortgages are complicated by nature, it is imperative to do thorough research and consult with experts within this field Before starting any process of Switching to a buy to let mortgage.

Can I Change My Mortgage to Buy to Let?

 

Can I Change My Mortgage to Buy to Let ?

The simple answer is yes; you can change your mortgage to buy to let. In fact, you must change to buy to let mortgage from residential when renting out your residential property. The law requires it. 

 

But as I said, a mortgage is often a complicated process, so is changing mortgage to buy to let. You need to have sufficient knowledge of it or need professional advice to do it swiftly. Let’s drive into the fact and discuss why’s and what’s of switching to buy to let mortgage. 

Why & When A Homeowner Switch to Buy to Let Mortgage

There are a few scenarios why an individual will need to change to a buy to let mortgage from a residential mortgage. The most common one we have faced as brokers is when our clients move from their existing home to a new property. In this scenario, a client would switch their current mortgage to a buy to let and maybe buy another property on a residential mortgage. This seems to be very popular amongst our clients as they are able to create an additional income as well as move into a new property.

Another scenario we have faced many times with our clients is moving out of their current residential property, which is mortgaged and moving into a family home or renting somewhere for work reasons. Again the client would need to switch to a buy to let mortgage in order to rent their existing residential property.

In some cases, we have seen clients switch from a residential mortgage to a buy to let mortgage Due to financial pressures such as loss of jobs etc. This enables the client to generate a rental income in order to meet the mortgage payments.

Benefits of Changing Mortgage to Buy to Let.

It’s Illegal to rent out a house that is under a residential mortgage. So, you must change to buy to let. But there are some added benefits if you convert mortgage to buy to let. 

One of the biggest benefits of switching to a buy to let mortgage is that you’re able to switch your repayment vehicle to an interest-only, thus reducing your monthly payment and hopefully making money from your rent after paying off your mortgage.

How to Change to Buy to Let Mortgage from Residential Mortgage?

Now let’s discuss when you should change to buy to let mortgage and what is the best ways to do so. 

The best time to switch from a residential to buy to let mortgage is when you are moving home and have decided to keep your existing property. This seems to be a very natural progression into the buy to let market for existing homeowners.

Additionally, if you are switching to a buy to let product with a new lender, It is financially beneficial to do this when your current rate is coming to an end. This will allow you to save money by not having to pay any early repayment charges.

The best way to change to a buy to let mortgage is to contact your existing lender to see if they are able to offer you a buy-to-let product. Suppose you are with a mortgage lender that does not have a buy to let product, then those lenders may be able to offer you consent to let permission for a period of two to three years. This will then give you enough time to switch to a buy-to-let lender when it is suitable to do so.

One of the most common ways our clients switch to a buy to let product when moving from a residential home Is through re mortgaging their existing residential mortgage. The benefit of re-mortgaging to a buy to let lender is that you are maybe able to release some equity from the existing property in order to buy the new property. You can also release equity from the existing residential property through a buy to let mortgage for other uses such as debt consolidation, holiday homes, home improvements etc.

How Expert Mortgage Brokers Can Help? 

It is important to take the right action when you are letting a residential property. In most cases, it is illegal to let out a residential mortgage property without the lender’s knowledge. Please be very careful, as this will have a detrimental effect on your related insurance policy attached to the residential mortgage property. For further clarity, please call one of our experts at your convenience for any help.

We are independent mortgage brokers that have access to various clubs and networks, which enables us to get the best rates for remortgaging existing residential property to a buy to let. We have helped hundreds of clients switch from a residential to of buy to let mortgage and have faced many different and complex scenarios. Please feel free to call one of our expert mortgage brokers for further information on this subject.

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