Ever Home Mortgage
Ways to make it easier to get your Second Home Mortgage
If you're thinking of buying a second home now that the obvious place to buy it is in UK. With the pound falling steadily against the euro, second homes on the continent has become much more expensive. And with airlines being hit by the spiraling cost of fuel that your second home in the UK makes even more sense.
What's more, with house prices falling, it's a really good time to go after your second home. The only snag is that Mortgages is harder to get. So how will you finance your second home?
Well, there are ways to make it easier to get your second home mortgage.
• A second home mortgage is a mortgage on a property that is not your residence. The lender will look at all your expenses, and will look at any debts secured on your home, before deciding whether to grant mortgages. If you have no mortgage on your principal residence that will make it easier to get a second home mortgage – you have a lot more security to bid at.
• Even in these days of credit tightening is still a good supply of mortgage loans available for those who can make a substantial deposit – ie there is looking for a low loan-to-value ratio mortgages. If you can release equity from your primary home to make a substantial deposit at your second home, you Do not have a problem getting your second home mortgage.
• If you plan to rent the house as a business and not to live in it yourself, you will need to apply for another type of mortgage – a buy to let mortgage or a holiday let mortgage. But even if you want to use it yourself, you still want to let it out a few times to help with finances. If you do, make sure that it is permitted under the mortgage. But it makes sense, both to prevent it from standing empty for too long and in order to help you afford your second home mortgages. (Remember that the tax payable on rental income at your ordinary tax rate, but the interest element of your holiday home repayment of loan is tax deductible.)
• It will be easier to give your second home mortgage if you go to an interest-only instead for a repayment mortgage. But you need to have a clear plan for repayment of capital by the end of mortgage term. These days you can not trust the house that has appreciated in value, so you can not expect to sell it at a profit. Of course, if the idea is to eventually use it as your retirement home, you should be able to repay it by selling your main home.
There is no doubt that the mortgage on most types are harder to get at the moment. But you can still get a second home mortgage provided the lender is satisfied there is minimal risk. The more you can demonstrate your ability to afford it, the easier you should find it to get a loan.
About the Author
Sean Horton is a Director of
Enhanced Wealth
who offer
second home mortgages