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How can I get a second home mortgage?

Written by Sam Jones on 24 June 2015.

We are delighted to see so many Britons buying second homes for holidays, work or perhaps their retirement.

These are homes not used as rental properties but for those who have enough spare capital to purchase a second property of their own.

The latest available figures from the 2011 Census show 1,5 million residents in England and Wales - 2.8 per cent of the population – with second addresses that they used for 30 days or more each year.

In addition there were 47,733 usual residents of England and Wales - around 0.1 per cent of the population – with a second property in either Scotland or Northern Ireland.

Another 820,814 residents – or 1.5 per cent of the population – had second homes outside the UK. In total there were 4.4 per cent of residents had second homes somewhere.

But back to England and Wales. Most of those polled said it was for a purpose other than work or holiday such as a home for their student children.

A total of 12 per cent (188,837) of people with a second addresses recorded that they were for work and 11 per cent (165,095) that they were for holiday.

Cornwall was the most popular area for second homes with 22,997 individuals putting up sticks in the southern county.

However, most people don’t realise that getting a second home mortgage is not the same and a much trickier process than your first.

How to get a second home mortgage

Owning a second home can be a great lifestyle choice for those with the funds.

There are a number of options to fund it. You could remortgage your primary property to fund another purchase or you could take out a separate mortgage.

A simple remortgage is more straightforward in many ways if you have a lot of equity in your home and are happy to release it.

Since the crash many lenders have backed off lending on second homes making deals harder to come by.

But advisers can scour the market and access specialist lenders - not readily available on the high street - who are more flexible in their offers.

It is also highly unlikely that borrowers will be able to benefit from interest-only mortgages given these have undergone a significant retreat in recent years as lenders de-risk after the crash.

But some are available and you should not instantly dismiss the possibility without seeking professional advice.

Lenders will take into account your total debt levels so a second mortgage will be harder to get than your first. It is not a simple case of inputting your details into a mortgage calculator and lenders will want to make a better assessment of your finances.

We have also seen tough new mortgage rules make it more difficult to get a deal in all circumstances and more restrictive to lend large amounts of cash.

This will affect anyone buying a second home, probably even more than first homes as the risks are greater and lenders are careful about managing their loans.

It is always often helpful to speak to professional advisers to ensure you getting the best deal available when making such a monumental decision.

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