If you are interested in buying a holiday home, you may be wondering about the chances of finding second property mortgages in the current climate.
In fact, however, now may the perfect time. Why? Because there are signs to indicate that the market may be turning the corner – recently the number of mortgage approvals increased for the first time for many months. So if you look now, you should find some excellent bargains, before prices start to take off again.
But before you grab the first property that catches your eye, for fear of losing out, you need to stop and check that you know what you’re doing. Second property mortgages are a big drain on your personal finances, so you need to be absolutely certain you’re doing the right thing.
- Have you thought through whether a holiday home is really what you want? It’s not just second property mortgages themselves that can be a real burden on your finances, but also all the other costs of owning a second home: council tax, insurance, maintenance costs, utility bills. In order to justify all this expense, you will probably feel you have to spend all your holidays there. Will you be happy with this? Or are you the sort of person who likes to go somewhere different every year? If the latter, you may regret putting all your eggs in one basket.
- If you’ve already picked a property, are you sure it’s absolutely suitable for you in every way? Or did you just decide to buy it on a whim? We’ve all had the experience of having a wonderful holiday in a gorgeous spot, and falling in love with a property there. But this is never a good basis for applying for second property mortgages. You need to be more hard-headed – view the property in winter when the area may look more bleak and deserted. Have a proper survey done to see what hidden problems there may be. Take off your rose-coloured spectacles before you buy.
- Are you sure you can afford it? Remember that second property mortgages are usually more expensive than first mortgages. You don’t qualify for first-time buyer status, so you don’t get the special rates. Have you already got a hefty mortgage on your first property? Have you got other debts? It may be a special dream, but is it really worth saddling yourself with debt you may not be able to manage? This could cancel out all your enjoyment of your holiday home.
- Do you want it for its own sake? Forget any thoughts of buying your second property as an investment. If you are lucky it may appreciate in value, but you absolutely cannot count on this. So don’t take on a load of debt on the assumption that the property will turn into a goldmine in the long run. Events of the last couple of years have shown how disastrous such an assumption can be. Buy your holiday home because of the pleasure and enjoyment it will give you – and if its value does increase, that’s a bonus!
Have you ticked all these boxes? Then congratulations, a second home may really be the right thing for you.