Here’s a cautionary tale for those people with holiday lets.
We are often called by new clients to sort out the mess caused by other mortgage advisers. Typically, this will be selling a buy to let mortgage when what’s really needed is a holiday let mortgage. After all, the property will be let to holidaymakers and run as a holiday lettings business so it’s clear what is required. The client gets almost to the point of exchanging contracts when the lender finds out that the property is a holiday let and not a buy to let and so immediately withdraws the mortgage offer. We then have to run around to secure appropriate holiday let finance so the purchase does not fall through.
Well today we were contacted by a new client who has an existing Coventry buy to let mortgage on a holiday let. Coventry have found out that the property is used solely as a holiday let, which they of course do not lend on. Being the kind souls that they are, they have informed our client that she has infringed the mortgage terms and would she please repay all of the mortgage as soon as possible.
Fortunately, we are able to replace the Coventry buy to let mortgage with finance that is suitable for a holiday let. Unfortunately, the client now has to pay all of the fees and costs for a new mortgage to replace the buy to let she has had for less than 12 months.
If appropriate mortgage advice had been given at outset this client would not need to quickly raise finance to pay off the Coventry buy to let mortgage. The only redeeming factor is that the Coventry deal does not have Early Repayment Charges.
Always ensure your mortgage broker is fully aware of what you require and ask them to confirm that the mortgage suggested is completely suitable for your requirements. If in doubt walk away and seek alternative mortgage advice.