Second Home Mortgages
There are lots of reasons why you might want to buy a second property. Before you go ahead, make sure it’s something you can afford and that you’re aware of all the potential costs involved.
Arranging a second home mortgage purchase, is a relatively straightforward process when approached in the right way.
Essentially, second home mortgages follow the same process as mortgaging your main residence. The only difference is the monthly payment on your current home is factored into the lender’s affordability calculation, ensuring you are able to comfortably afford both payments on your current income. You will also need to satisfy all the usual criteria, such as having a large enough deposit, a clean credit report, and a suitable repayment schedule in place.
Paying two mortgages makes you a higher risk to the lender. This is because there’s a greater chance you won’t be able to afford it if things don’t go to plan. As a result, any lender is likely to be cautious about lending to anyone taking out a second home mortgage. They will almost certainly enforce stricter criteria with a second mortgage. This might include a larger deposit than the one for your first mortgage (as much as 25%), as well as higher interest rates.
All lenders check if you can afford the monthly repayments before they offer you a mortgage. When you apply for a second mortgage they consider how much you already pay towards your current mortgage to make sure you can afford another property.
If you are buying property as an investment, the lender will look at how much rent you could charge for it. They take this into consideration when they work out how much you can afford.
We don’t tend to publish mortgage rates on our website – ever more so for second home mortgages. In most cases rates are negotiable and based squarely on the individual circumstances of the borrower, their plans, assets and income.
Firco is an independent mortgage broker that has strong relationships with the key lenders in the UK mortgage market, including those private banks who do not have a high-street presence. We arrange bespoke mortgage solutions for our clients, providing a tailored one-to-one advisory service, delivered face-to-face or remotely, depending on what suits you.
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