The term second mortgage or second home mortgage can mean different things to different people.
Let’s first look at a second mortgage or second loan in the context of your main home or private residence. Most people have a mortgage on their home and this will be the first charge mortgage against the property. It is possible to have a further, or second, mortgage on the same property and this will be the second charge against the property. Second charge loans or secured personal loans are used when for some reason the main mortgage company is unwilling to lend. Second loans can be used for any purpose and are very quick to arrange.
If you wish to buy another property, other than a buy to let, then a second home mortgage could be the answer. Typically, these mortgages are used when you wish to buy a second home or maybe a holiday home for you and the family to use. For holiday homes the mortgage lender will look at your income in relation to the total of your main mortgage and the second home mortgage you wish to borrow. For some people this poses no problem providing their income is sufficient to support the total of both mortgages.
Should the intention for the second property be to use it as a holiday let rather than use as a second home then a different type of mortgage is needed. Lenders differentiate between a second home and a holiday home that is to be let. Very few lenders allow a property to be used as a holiday let. In addition, many second properties can have a restriction on how they may be used. This could mean that you are unable to permanently live in the property throughout the year. Again, very few lenders like these situations.
Fortunately, we are experts in holiday let mortgages and holiday home mortgages. Mortgages can also be arranged for properties that have a usage restriction with the mortgage based on the expected holiday rent plus your own personal income.
Please contact us if you would like to discuss a second home mortgage or holiday home mortgage.