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Purchase of a second home
No matter whether you want to buy your vacation home or just increase your rental revenue by purchasing one, there are many good reason why you should buy a second home. When you apply for a mortgage on a second home, your financial situation will be scrutinized so that it is best to make sure that you are ready for all possibleities.
Everyone who buys an addition in England and Wales - buy to let, second home or vacation home - must add 3% tax even if the sale is below the 125,000 pound mark. Each mortgage claimant must also have his financial situation subjected to stresstests.
It is a forward review conducted by the creditor to make sure that you can keep up with the payments made each month, even if interest levels rise drastically. Also, keep in mind that taking out mortgage backs puts added strain on your financials, so it's a good idea to discuss your mortgage choices with a mortgage consultant before proceeding.
When you have a plan to let a new home, you should explore the area's lease markets before buying because you need to demonstrate that the home is a good return for your creditor. Your amount of money you make on your lease must be above an agreed upon percent of your mortgage payments each month.
In order to minimise the risks, some creditors impose restrictions on the claimants - either with a ceiling that they can lend, or with the number of loans to buy that can be kept. In order to take out a second mortgage for a vacation home or a second home, your mortgage lender will need to prove that one of the homes continues to be your primary home.
You also need to show good reasons for purchasing a second home. If you buy to rent Mortgages, you tended to be more expensive than residential Mortgages because any tenant-free periods in the Property would naturally break the rent earnings. Obviously conditions can vary, and so it may happen that you want to rent your second home, in order to do so, talk to your creditor about "consent to rent".