Monday, Jul 16, 2007
After the BTL craze... the LTBs are here!
Independent: Owners warm to renting out and trading up
More homebuyers are switching to a "let to buy" home loan to allow them to keep their existing property while buying a new one. Broker My Mortgage Direct reports a sizeable increase in the number of people using this type of mortgage over the past six months. LTB allows people to trade up to a new home and let their old one out.
Posted by confused76 @ 09:31 AM (207 views) Add Comment
5 Comments
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1. tyrellcorporation said...
This is an EA trick! A friend of mine recently went in to an EA to sell his house. He came out an hour later with an arrangement to let out his current house and to take out a mortage on another. Very dodgy practice IMHO and if things go sour in the market expect to see some litigation concerning bad advice, etc, etc.
2. george monsoon said...
Oh dear, oh dear, o dear..!!!
whoever takes out this kind of deal is in for a BIG surprise!!
Im sure they are shown a list of expected rental yields. Now I wonder how they will feel in a few months time, when their property is still empty, because they are asking for too much rent and still have to pay their mortgage..
3. doomwatch said...
The EAs are laughing all the way to the bank here. They get commision on the sale & the place you rent out. You take
all the risk with tenants and the DOUBLE mortgage (yes this is what it used to be called befor the VIs invented the more palitable phase of "taking equity"). Brilliant.
Not to worry though, as "it's a long term investment". Bricks and mortar. Brick and mortar. Yawn, yawn, fooking yawn.
4. Algenon said...
Negative Equity on two properties at some point - nice one!
5. realist75 said...
This IS an EA trick. We were offered it 3 years ago. We'd found a house we wanted but didn't have a buyer for ours, so the estate agent for the house we wanted to buy wouldn't take it off the market, fair enough. We were offered the let to buy as a way of instantly securing the money for the other house. In theory we would have done well as house prices have carried on, but it meant we would have taken on a monumental mortgage that I didn't feel comfortable with. As it happens, with the interest rate rises of the last 3 years, we would have been crippled. It's all very well talking 'long term', but a lot of these buy to let to buys don't consider that financially, they may not be able to 'sit it out' in the short term. People are being duped into thinking that nothing will ever change except house prices rising in isolation to rates. Amatures will get burnt.