Accidents happen. Fact. And as a holiday cottage owner you need to expect some damages at one point or another....
With so many different kinds of mortgages available, and so many different businesses offering mortgages, it’s important to find the best one for a holiday property let.
Buying a holiday cottage in the Cotswolds can be a very worthy investment, but there are, of course, plenty of things that needs doing, and doing right, before you can start making a profit from your investment, and one of those is getting the right mortgage.
In your search for the right mortgage for your Cotswold holiday cottage, the most important thing is to compare. A holiday property mortgage is a significant investment and one where the finer details will have a real impact on your profit.
Your holiday home will most likely be classed as a second home, regardless of the fact that you will not be using it as a home yourself. So what can you do to be approved for a second mortgage? Most of the traditional High Street banks and building societies are unlikely to offer mortgages for holiday lets. They may offer the more traditional ‘buy to let’ mortgages, but these are generally aimed at long let investments rather than holiday lets, as there is a different type of risk involved. On a holiday let, the income is not guaranteed by people renting all year round, there will be peaks and times with no income at all and the rental income is likely to fluctuate.
The extra uncertainty that comes with a mortgage on a property used for a holiday let, will undoubtedly increase the level of extra checks the mortgage companies go through to ensure that you can keep up with repayments, regardless of the property being vacant or rented out. You may be asked for a larger deposit than you would with a standard mortgage; deposits of around 25-30% of the value of the property are not uncommon for holiday lets. If you have 40% or more you will dramatically improve your chances of acceptance.
That in mind, a holiday property mortgage has some great advantages too. Once you’ve jumped through all the hoops, your perseverance and commitment will pay off and you could benefit from tax reliefs as holiday cottages often are viewed as business ventures, and as such, any losses incurred can be offset against future profits.
A great place to start your search for a holiday cottage mortgage is with Which? Mortgage Advisors.