What are buy to sell mortgages?

Buy to sell mortgages are mortgages used to purchase a property which you then sell on, hopefully for a profit. Buy to sell mortgages are very common with buy to let mortgage borrowers and investors.

How does a buy to sell mortgage work?

Buy to sell mortgages work by allowing you to quickly buy a property and sell it without the standard limitations of a standard mortgage.

Buy to sell mortgages are mortgages which are used by buy to let investors when they look to buy and sell properties immediately after.

Buy to sell mortgages are not usually available from high street mortgage lenders but can be found from specialist non-high street mortgage lenders. High street mortgage lenders who provide buy to sell mortgages may not be as competitive as those provided by specialist buy to sell mortgage lenders.

Where a buy to sell mortgage may be suitable for you will depend on what your financial plans are. In some cases, a standard residential mortgage may be much more suitable than a buy to sell mortgage but in any case, a buy to sell mortgage may be more suitable if you intend to sell the property within 12 months of buying it.

Buy to sell mortgages vs standard mortgages

Buy to sell mortgages have a host of differences between them and standard mortgages.

Buy to sell mortgages do not have early redemption fees which make them less costly for those looking to have the mortgage for a short time period. On the other hand, standard repayment mortgages may have early repayment charges which will make them not viable for those looking to redeem the mortgage as soon as possible. Early repayment charges could range from a few hundred pounds to a few thousand pounds and this can affect the profitability of the buy to sell mortgage property deals.

Standard repayment mortgages will also usually not allow you to redeem the mortgages for a minimum of 6 months after you have taken out the mortgage. This is not the same with the buy to sell mortgages as they allow you to redeem them at any point from which you take them out. The buy to sell mortgage gives you the flexibility to sell investment property as soon as possible without any limitations or undue costs.

Can you get a mortgage to flip a house?

Yes, you can get a mortgage to flip a house and there are a variety of mortgages you can use when looking to flip a house. Buy to sell mortgages are one of these types of mortgages you can use to flip a house.

What kind of mortgage do I need to flip houses?

When considering flipping homes there are three main types of mortgages that may be applicable to you.

They include: buy to sell mortgages, flexible mortgages and refurbish loans.

Buy to sell mortgages:

Buy to sell mortgages are for those looking to flip a property relatively quickly. This could be due to several factors.

Bridging loans are a type of buy to sell mortgage which you could consider when looking to flip a property relatively quickly.

Bridging loans may be more costly than a mortgage alternative but they can be used for properties where getting a mortgage may be much harder.

Buy to sell mortgages and any forms of it can be very useful when considering properties bought at auction where the property purchase needs to be completed within 28 days.

Flexible mortgages

Flexible mortgages are mortgages where key features of it are more flexible than you may normally find on standard mortgages. Flexible mortgages could allow overpayments or underpayments. Flexible mortgages could have no early redemption fees, low mortgage arrangement fees etc.

Flexible mortgages may also not have any limitation or minimum term you must wait before redeeming your mortgage.

The nature of flexible mortgages makes them very essential for people looking to flip homes.

Refurbish loans

Refurbishment loans are loans which are given for you to refurbish properties. They have one advantage than standard repayment mortgages as the amount you can mortgage is the assumed value of the property post refurbishment rather than the current value of the property.

This means you can get access to much more funds with a refurbish loan than you would have with a standard repayment mortgage.

Standard repayment mortgages may also not lend on properties which are uninhabitable and need work done. Refurbishment loans, on the other hand, cater to these kinds of properties.

How do you borrow money to flip a house?

To borrow money to flip a house you should speak to a mortgage broker who can fully assess your case and provide you with options from which you can borrow money to flip a house.

Buy to sell mortgages are a specialist part of the mortgage market and you may need a buy to sell mortgage broker to properly assess your mortgage options and provide you suitable mortgage recommendations.

Getting a buy to sell mortgage may be further complicated if you have bad credit or are self-employed.

Can I get a second mortgage to buy a rental property?

Yes, you can get a second mortgage to buy a rental property. This second mortgage doesn’t necessarily have to be with the same mortgage lender.

Most rental properties are purchases using a buy to let mortgage which a buy to let mortgage broker may be able to advise you on.

Can you sell a house with a mortgage?

Yes, you can sell a house with a mortgage. When selling a house with a mortgage you will need to redeem the mortgage by requesting a redemption satament from your current mortgage lender.

John Bate

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.