Buy to Let with Equity Release

Buy to Let with Equity Release

Can I Buy a Buy to Let with Equity Release?

Are you looking to buy an investment with equity release?

Then a buy to let scheme is certainly doable. Whether you’re opting for a lifetime mortgage or a home reversion plan, you can use the equity to buy a second property; Whether this be a holiday home or a buy to let investment property.

When purchasing a new home and using equity release, the property does need to be accepted by the Equity Release Council Standard. This is to ensure the continuing equity is maintained.

But if you’re choosing a buy to let scheme, it’s more than likely you will be staying in your current property. Therefore, you’d like to think you will keep up on the house maintenance.

As long as you have sufficient equity in your home, there is no reason why you can’t go ahead with purchasing a buy to let property.

The general rule on buy to let properties is that you have a deposit between 15- 25% of the house value purchase price. And as with maintaining your current home, you are also required to maintain your buy to let property.

In this situation, it is always best to seek advice from a financial advisor.
With buy to let properties, mortgages tend to be slightly higher than that of residential ones.

This needs to be clear that this is a buy to let property, as any misleading information about how you’re using it for a cheaper mortgage, is actually considered as fraud.

Equity release is an ideal financial way of building up your investment portfolio if you are over 55 and your current property is worth more than £60,000.

Investing in a buy to let scheme can give you financial freedom for your retirement, especially if you are opting for equity release.

Equity release could potentially mean the interest on the loan isn’t paid back until you pass away, are taken into care or the house is sold.

Equity release is also under a no- negative equity policy, so even if there isn’t enough left over after you pass away, your beneficiaries will not pay more than the worth of the house left.

Your home/property may be repossessed if you do not keep up repayments on your mortgage.

Some buy to let mortgages are not regulated by the Financial Conduct Authority.

You will need to take legal advice before releasing equity from your home as Lifetime Mortgages and Home Reversion plans are not right for everyone.  This is a referral service.