Like any other kind of mortgage, holiday home mortgages are more difficult to find than they were a year ago. But that doesn’t mean they aren’t available. It does mean that as there are fewer to go round, lenders are fussier about who they offer them to.
So people looking for holiday home mortgages need to be very clear what lenders are looking for. If you are hoping to buy a holiday home, here are some tips to make it easier to get a loan.
1. First and foremost, consult a mortgage broker – find one who deals specifically in holiday home mortgages. This will save you an immense amount of time and trouble in finding out which lenders are still offering holiday home mortgages, and where to find the products most suitable for your own requirements.
2. Make sure you have a good deposit. Nowadays there is no way you are going to be able to borrow more than 70-80 per cent of the value of your holiday home. What’s more, the bigger deposit you have, the more favourably the lender will look at you. The easiest way to raise this kind of money is to capital raise on your main home. If you still have a big mortgage on your main home, you should question whether you can really afford a holiday home.
3. The lender will look at the condition of the property you want to buy. The problem is that the cost of holiday homes in popular areas has spiralled out of reach of many people. So you may be looking at a property that needs a lot of work or even a derelict property to do up. The lender may be unwilling to lend on a property that may not provide them with adequate security. Rather than looking at a property in poor condition, you would be better advised to look in areas of the UK that haven’t yet taken off as holiday spots, but still provide attractive holiday options – Northumberland, Lincolnshire, Lancashire for example. This way you should still be able to find viable properties at a reasonable price.
4. Like many people you may be looking at cheaper holiday home options such as static caravans, log cabins or holiday park homes. These make ideal holiday homes – lower maintenance and usually located in beautiful areas. However your options for holiday home mortgages are more limited. There are actually a few lenders who will consider mortgages on holiday park homes – the best way to find one of these is to consult a broker. For a static caravan you will probably need to take out a personal loan or remortgage your own home.
With all the stories of mortgages being hard to get, you may have thought your dream of owning a holiday home might be over. But don’t give up. There’s no doubt that there are fewer holiday home mortgages around, but there are still lenders who are happy to lend to the right people. And don’t forget that with less competition it’s a buyer’s market!