Do I need a holiday let mortgage?
- Date: 2007-06-08 - Word Count: 478
Share This!
If you are considering purchasing a second property you may have asked yourself this question. Do I need a holiday let mortgage?
Well the answer rather depends on a couple of points because Holiday Let Mortgages are different to standard mortgages.
The main two differences are what the property will be used for and can you afford the holiday let mortgage by yourself or do you need the rental income. Mortgage lenders will always want to know what a property will be used for. Most of the time the property in question will be a main home and will be used as such. Buy to let properties are generally 100% tenant occupied, the owner does not and will not live there and the tenancy is based on an AST.
Second properties however can fall into one of 2 camps. Firstly, you could use your second property simply as a holiday home, friends and family will use it but you will not let the property out to strangers. Secondly, you could occasionally use the property yourself but it will also be let out to holidaymakers to bring in some additional rental income. Most holiday let properties will command high weekly rents in the peak season making the rental option a very attractive one.
Many mortgage lenders are happy for you to buy a second home and use it as a holiday home for friends and family. They will look for your personal income to cover both mortgages together. However, if you intend to rent the property out then a holiday let mortgage will generally be required.
A holiday let mortgage will allow you to use the holiday rental income as the extra �salary� needed to get the mortgage. The rent needs to be a certain percentage above the mortgage payments but as you will be putting in a 15% or 20% deposit the calculation can work nicely. This is basically how a buy to let mortgage will work. If there is a shortfall in the rental income then some lenders will look to see if your own personal income can used to cover the difference.
If you are buying a holiday home you need to find out if there are any restrictions on how the property can be used. Contact the local authority planning department for these details. Some properties have a restriction making them unsuitable as a retirement property as they have to be rented for part of each year. Holiday let mortgages can be granted on these properties but the choice of lenders is limited.
Seeking the advice of an experienced mortgage broker is vital in this market. Many lenders do not openly advertise their holiday home offers and so the help and advice of a holiday let mortgage broker will save you both time and money.
--
Sean Horton is a Director of Holiday Let Mortgages who also offer a specialist holiday home insurance policy
Well the answer rather depends on a couple of points because Holiday Let Mortgages are different to standard mortgages.
The main two differences are what the property will be used for and can you afford the holiday let mortgage by yourself or do you need the rental income. Mortgage lenders will always want to know what a property will be used for. Most of the time the property in question will be a main home and will be used as such. Buy to let properties are generally 100% tenant occupied, the owner does not and will not live there and the tenancy is based on an AST.
Second properties however can fall into one of 2 camps. Firstly, you could use your second property simply as a holiday home, friends and family will use it but you will not let the property out to strangers. Secondly, you could occasionally use the property yourself but it will also be let out to holidaymakers to bring in some additional rental income. Most holiday let properties will command high weekly rents in the peak season making the rental option a very attractive one.
Many mortgage lenders are happy for you to buy a second home and use it as a holiday home for friends and family. They will look for your personal income to cover both mortgages together. However, if you intend to rent the property out then a holiday let mortgage will generally be required.
A holiday let mortgage will allow you to use the holiday rental income as the extra �salary� needed to get the mortgage. The rent needs to be a certain percentage above the mortgage payments but as you will be putting in a 15% or 20% deposit the calculation can work nicely. This is basically how a buy to let mortgage will work. If there is a shortfall in the rental income then some lenders will look to see if your own personal income can used to cover the difference.
If you are buying a holiday home you need to find out if there are any restrictions on how the property can be used. Contact the local authority planning department for these details. Some properties have a restriction making them unsuitable as a retirement property as they have to be rented for part of each year. Holiday let mortgages can be granted on these properties but the choice of lenders is limited.
Seeking the advice of an experienced mortgage broker is vital in this market. Many lenders do not openly advertise their holiday home offers and so the help and advice of a holiday let mortgage broker will save you both time and money.
--
Sean Horton is a Director of Holiday Let Mortgages who also offer a specialist holiday home insurance policy
Related Tags: mortgages, holiday home mortgages, holiday let mortgages
Your Article Search Directory : Find in Articles
Recent articles in this category:
- The Secrets to Getting Low Down Payment Car Insurance
Upon purchase of a new car, there is almost always a requirement to buy an auto insurance policy as - The Wisdom Behind Auto Insurance Comparison Quotes
No one in his right mind would not go for a good deal. In fact, everyone is out on their feet and ru - The Benefits of Auto Insurance Comparisons Florida
Insurance can be expensive. This is something everyone knows about especially in the sunny state of - Auto Insurance Florida: The No-Fault Policy
There are different kinds of car insurance offered by a wide range of providers today. Different sta - Finding the Cheapest Auto Insurance Companies
Everyone is asking and searching for the cheapest auto insurance companies available today. Consider - How do You Compare Private Health Insurance Cover in Australia?
Deciding what is the best and most affordable private health insurance cover can be easy if you take - How Payment Protection Insurance Was Mis-Sold
For over six years the issue of Payment Protection Insurance (PPI) and how it was mis-sold to custom - Finding Quotes For Auto Insurance Online
One of the many concerns when you are shopping for auto insurance is being able to get access to quo - How You Can Find the Best Auto Insurance Online
When it comes to renewing your car insurance you are going to quickly discover that there are a numb - Guidelines For Searching For Auto Insurance Online
The internet can be a great source of discounts and values related to auto insurance. However, many
Most viewed articles in this category:
- Trading Forex With Pivot Points
Forex Pivot Point Trading are used today by Forex Traders and are calculated on the previous days mo - Where To Search For Free Grants
Where do you look for free grants? The search must be thorough or it could be an exercise in futilit - The Connection Between High Blood Pressure and Salt
We are a society of Salt Addicts. It cannot be denied. When you look at the things we do and the pla - Tips For Avoiding HYIP Scams
Before knowing about HYIP Scams, refer to the functioning of HYIP or "High Yield Investment Programs - Getting Credit After Bankruptcy
Consumers do not have to live sans credit following a bankruptcy. By following certain steps consume - Tips For Choosing A Credit Card
Are you looking for that perfect credit card? If so, you may be confused about what exactly to look - Cheap Car Insurance For Teens Online
Many elements determine a car insurance policy. Car insurance companies look at the person's age, hi - What Exactly Is Free Grant Money?
You can apply for free grant money from various government agencies. But where exactly does this mon - Small Business Owners Marketing and Customer Service
Marketing can be time-consuming, but it doesn't have to be hugely expensive now, thanks to the Inter - Apply Online For A Credit Card - How To Choose A Card?
The best type of credit card for you will be dependant on how you intend to use the credit card. Are