Below you will find some frequently asked questions on the subject of holiday let mortgages.
Is it possible to get a mortgage for a property you intend to let out for holiday purposes?
Yes. However, not all lenders are necessarily engaged in this type of marketplace and you may need to seek out a specialist who can connect you with appropriate financing.
Is this the same as a buy to let mortgage?
No. Although different companies may use slightly different terminology, generally speaking a buy to let mortgage implies funding for professional landlords who may be looking to let out their property on a permanent basis.
By contrast, holiday let mortgages are aimed more at property owners who wish to let their property out for a few months each year, typically during the peak holiday seasons.
Is any type of property considered suitable?
In general that is a difficult question to respond to because any lender may reserve the right to refuse a mortgage if they are uncomfortable, in any way, with the property under consideration.
There might be any number of reasons why your property would not be considered suitable for your mortgage or at least a percentage advance mortgage that you consider to be necessary.
Examples might include:
• a professional valuation that is significantly different to the price you and the vendor are discussing;
• you are seeking a loan that is too high given the potential lender’s assessment of the maximum amount they are willing to advance on the property concerned;
• the lender is uneasy about either the risks of the location, situation or the structural condition of the property.
In the final analysis, any mortgage application needs to be considered on its individual merits.
How much will I be able to borrow?
It is impossible to say with any certainty but the sums available will certainly be linked to a number of traditional variables:
• your income level;
• a professional valuation of the property you are considering (remember again, this might be a significantly different figure to the asking price even if you consider that to be reasonable);
• your overall financial position, including any existing loan repayments you may have in place.
Would there be any conditions attached to the loan?
Almost inevitably, any form of mortgage will carry terms and conditions that both parties will need to comply with.
You should read your mortgage proposal forms carefully before signing them, making sure that you understand any commitments being placed upon you in the process.
There may be some discussion about the nature of the lettings that will be considered valid under the terms of the mortgage and it may also require that you have full buildings insurance cover in place at all times.
On that subject, you must make sure that you have buildings and contents insurance specifically for holiday let properties. Owner-occupier cover will not be sufficient even if you occasionally spend time in the property yourself.