Holiday Home Mortgage Broker – Do I Need One?

Thinking of buying a holiday home? Very exciting isn’t it! Have you got a few hundred thousand pounds in your bank account? No? Then you’ll need to look for a holiday home mortgage. That’s the less exciting bit.

When looking for your holiday home mortgage there are two main ways you can proceed:.
1. You can go direct to your bank or building society.
2. You can look for a holiday home mortgage broker.

The problem is that if you try to obtain a holiday home mortgage direct from your bank or building society, you will usually find it isn’t altogether straightforward.

• Not all lenders are willing to offer mortgages on holiday homes, although the number of lenders who will is increasing. Some types of holiday home will only attract a mortgage from a specialist lender. In most cases, your bank or building society will only have access to their own mortgages or to a small panel of lenders. A holiday home mortgage broker who has access to the whole market will usually be able to find a lender who will consider your request.

• Lenders on holiday homes will usually only lend 70-80 per cent of the value of the property, so you need a large deposit. Often, the larger the deposit you provide, the better the rate you can negotiate. However, if you’re not used to it, it’s quite hard to do the negotiating yourself. If you use a holiday home mortgage broker, you can have the negotiating done for you, and you have a much better chance of securing the most advantageous rate.

• If you are like most people, you will already have a mortgage on your first home. So you need to be very careful about over-extending yourself. There are pros and cons on both sides about getting a repayment versus an interest-only mortgage for your holiday home. A repayment mortgage would hasten the day when your holiday home was your very own, but could you afford repayments at that level? A holiday home mortgage broker would be able to assess your exact situation and provide the right advice.

• The cost of the “conventional” type of holiday home is escalating out of many people’s reach. There are alternative types of holiday home that cost less – such as log cabins or holiday park homes – but only a small number of specialist lenders will provide mortgages on them.. You really need a holiday home mortgage broker to find the right lender for you.

Buying a holiday home can be great fun, or it can be frustrating and stressful. You really want it to be as much fun as possible. Using a holiday home mortgage broker can iron out the hassles and make it much more likely that you will enjoy your holiday home from the very beginning.

Sean Horton is a Director of Holiday Let Mortgages who are a holiday home mortgage broker.