In This Article
What is a buy to sell mortgage?
When people talk of buy to sell mortgages, they are usually talking about finance for properties in which they plan to sell in a short period of time following the purchase.
The type of finance taken depends on the transaction. A buy to sell mortgage could be considered both a standard mortgage with a flexible product or a bridging loan.
A flexible mortgage product means that there is no early redemption penalty therefore it can be sold at any point without needing to pay a penalty.
Often these types of products are variable rates such as base rate trackers.
There are however lenders that offer fixed rate products with no early redemption penalty, these are flexible mortgages.
Bridging loans are also often used by people wishing to buy and sell a property quickly.
The applicant may opt for bridging finance if the property is not suitable for a standard mortgage or if there is an urgency in the transaction.
This may be because it is an auction purchase or part of a chain that needs to complete quickly.
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Can first time buyers get a buy to sell mortgage?
First time buyers can get a buy to sell mortgage.
First time buyers can apply for mortgage products that have no early redemption penalties with the lenders that offer them.
Not all lenders have penalty-free products so best to talk to a qualified mortgage adviser who can point you direction of a suitable product.
First time buyers are also able to qualify for bridging loans when they meet the rest of the lending criteria.
As bridging loans generally work on a retained interest basis, they require a higher deposit than a standard mortgage.
If however, you have the deposit needed to take a bridging loan to buy the property you plan to then resell, there should be a lender that is willing to help you.
If the property requires work and you are looking to improve and sell you may need a renovation mortgage for a first-time buyer.
If you would like to find out more information on bridging loan options, look for an experienced bridging loan broker.
Can I get a buy to sell mortgage with bad credit?
Some lenders that offer mortgages with no early redemption penalties can also consider applicants that have had adverse credit in the past.
Adverse credit is complicated as it comes in all shapes and sizes. Bad credit can consist of county court judgements, debt management plans, individual voluntary arrangements, arrears, defaults and so on.
Your mortgage adviser would need to get an understanding of what the bad credit was, when it took place and whether it does now been settled.
With this information and full details of your scenario, a mortgage adviser can look for a suitable lender that offers no early repayment charge allowing you to sell the property without penalty.
Many bridging loan lenders can lend to people that had adverse credit in the past.
Similarly, your bridging loan broker will need to know about the adverse credit in more detail to be able to look for a suitable lender for you.
Bad credit may affect the rates and fees that you pay to the lender for products as it may be that you need a Specialist Lender.
An experienced mortgage adviser would be able to confirm this. To find out more about your credit history, you can go to Check My File and download a free report.
Can I get a buy to sell mortgage for a buy to let property?
Although it is possible to get a penalty free buy to let mortgage allowing you to sell the property in the future, the products are not designed to be short-term finance.
Some lenders will decline the application if they believe that the intention is to sell it almost immediately as they feel that short-term finance should be taken to facilitate the transaction.
The ones that do offer penalty-free products do so based on allowing flexibility should you need to sell your property in the future.
Regarding bridging loans on buy to let properties, if you intended to sell the property very quickly, putting a tenant in the property may be dangerous as it would limit the number of people that could buy the property when you come to sell it.
This is because the tenancy agreement would need to be honoured by the new purchaser.
When you talk to a mortgage adviser, tell them what your intentions are so they can give you individual advice to suit your requirements.
Can I get a buy to sell mortgage for a commercial property?
Most term mortgages for commercial properties have penalties for repaying the mortgage early. Therefore, it may not be suitable to take a term mortgage on a commercial property can you plan to sell again very quickly.
Having said that, products change regularly so best to find a commercial mortgage adviser who can confirm if there are any suitable products for quickly buying and selling a commercial property.
If bridging finance is required to buy the commercial property, this could be an option for reselling it quickly.
Bridging loan lenders need to know what your repayment plan is, with sale of the property being a common repayment method.
Bridging loan lenders lend on commercial properties and a bridging loan broker would be able to tell you what your options are for a certain type of commercial property.
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Do I need a buy to sell mortgage broker?
You do not necessarily need a buy to sell mortgage broker but it is important to look for a mortgage adviser with relevant experience in your transaction.
For example, if you are a first-time buyer looking for bridging finance and have bad credit, not all mortgage brokers will have experience arranging this type of transaction.
You should ask the broker whether they have seen a situation like yours in the past and managed to place the transaction.
Finance such as bridging loans is complex so not all mortgage brokers specialise in this area. Read up on Complex Mortgages here.
This is also true for residential mortgages. Brokers that specialise in commercial mortgages may not advise on residential products.
Do your due diligence when picking a mortgage adviser and find out what their experience is.
Conclusion
It is possible to find mortgage products and bridging loan products that facilitate buying and selling a property quickly.
Like with any mortgage or bridging loan product, the market is complex so it is always recommended to find a professional that can make sure the product is suitable for you.
Be sure to tell them your full situation and intentions so they can find a suitable solution.
Please complete the contact form if you would like I NEED ADVICE to match you with an experienced mortgage adviser who can give you bespoke advice.
The information on this page is not tailored to any individual readers and should not be considered financial advice under any circumstances.
If you are seeking advice about a mortgage, you should consult a qualified professional.
