Buying a second home?
Here’s what you need to know
The key to securing a mortgage for a second home is to have a decent deposit.
You will be seen as a higher risk by many lenders so expect to have to raise a significant deposit – typically 15-20%.
There will be some lenders who may be open to a lower deposit but then you will need to meet other strict criteria.
In a nutshell, the higher the deposit, the more chance you have of securing a mortgage with a competitive rate and terms.
You will also have access to more lenders as you won’t be seen as such a high risk.
How to raise a deposit:
- Use the equity in your first home. If your home has gone up sufficiently in value since you first purchased it, you could remortgage to release some of this value (known as equity) to use as a deposit.
- Ask for a loan or gift from family and friends: Birthdays, Celebrations, Anniversaries – all events where you could be gifted money.
- Use your other assets. If you have an investment portfolio, SIPP, valuable car, jewellery or collectables – in fact anything of value – a specialist broker, like largemortgageloans.com, can find a lender who will lend you money for a deposit using your other assets as security. This is known as Lombard or margin lending.
