Obtaining a Mortgage on a second homeAcquisition of a mortgage for a secondary residence
Jammie has the money to make mortgage repayments, but due to some past lending problems she cannot get a mortgage.
But Pam is willing to take out the mortgage on her behalf, but doesn't really want to overpay. Remember that from the bank's point of view this would be a second home for Pam and therefore the interest would be higher - unless Pam thinks outside the box. What is more, the interest rates would be higher.
See, Pam has her own free and clear home - she doesn't have a mortgage. That' the keys to the answer for Pam and her little girl. So all Pam had to do was take out a mortgage against her main home and use that cash to buy the home for Jamie.
Here, too, owner-occupied mortgage loans earn lower interest than rented apartments or holiday apartments. but it would stay in Pam's name. I' d say Jamie would make the payment as rent. Jamie would come into the house after Pam's passing.
Whilst Pam would own the house and receive the fiscal advantages, Jamie's mortgage payment would be lower than her actual rental. She' d end up with a house. When you are considering purchasing a second home (for whatever reason), you should consider using the capital of your main home. You will never get a lower installment than in a self-occupied apartment.
Let me put on protocol and say that you should only buy a house for your baby if you can really buy it. Will he really make these payment? What if he gets into a difficult phase and doesn't make his payment to you, how will that affect you?
For the same reason, I'm not a holiday home aficionado. Holiday homes usually do not appreciate as much as other properties, they can be costly to look after and are often under-used. This means that it is usually much less costly to buy a place a few days a year than to buy a holiday home.
However, with that said, if you choose to buy a second home, your funding options of choosing would be to first use the capital of your main home. Which other innovative Ideas do you have to help people looking for a mortgage on a second home?