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Second Mortgages- Checks and Challenges

Written by Sam Jones on 03 December 2012.

When talking about a second home mortgage, this can mean anything from a holiday home, to a second property for later life plan; to housing for one’s children, or as a property investment to be rented out to tenants. Moreover the applicant might not have a mortgage on their primary address, or this might well be a second mortgage. All these elements, and more, will be taken into account by the lender. 
 
  Those trying to get a second mortgage already own a property, so in theory have at least a reasonable credit history or income to have purchased a property in the first place. However when considering an application, lenders must consider that incomes can be stretched in order to pay any mortgage- second or not. Similarly, if the property is for redevelopment and resale or to be tenanted, there has to be the consideration of how likely these properties are to make a healthy return. 
 
  The responsibility of a second property is not taken lightly, and lenders tend to be more cautious when considering second property mortgage applications. New rules and practises regarding lending mean that tighter checks on credit and income history of applicants will help determine who can realistically afford a second mortgage.
 
  Despite tighter checks on applicants, those on high incomes may receive some leniency when having their applications scrutinised, so long as affordability can be demonstrated.
 
 
 

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