If you are considering buying a second home, you have reached the right blog! We will go through some questions and material as to what to consider when making such a significant decision. Despite the fact that mortgages maybe the focus in a purchaser’s mind, one will need to have a plan of action as to how to best make use of the property – whether to live in or rent out. Will this house be a fix-upper that requires significant funding to renovate? Will you be doing the renovations yourself in an attempt to save costs? There will be additional expenses in acquiring a 2nd home that will need to be taken into consideration when purchasing. In the event this is a property being used for investment purposes, it will be important to know your budget when paying down the mortgage and making changes and renovations to the property if need be. Some clients have chosen rental properties that require only a tenant to pay the rent which works inline with their financial plan, in such cases its a fairly straightforward budgeting calculation. It always makes sense to consult with a mortgage and financial professional when embarking on this path.

You’ve taken a look at second home mortgages, but can you get one and if so, how do you qualify for it?

Firstly, what is a second home mortgage?

A second home mortgage is a mortgage that’s taken out to buy a second home, not to be confused with a second charge mortgage.

In order to get a second home mortgage you need to talk with your mortgage broker, typically mortgage lenders tend to be stricter when it comes to assessing and taking out a loan for a second home. Often mortgage lenders think that it’s more likely the borrower (you) won’t be able to pay back the loan if things don’t work out, this means you’ll be offered higher interest rates and be asked to put down a larger deposit.

So, we’ve talked about what a 2nd home mortgage is and how it will be different in comparison to your first home mortgage, but how do you qualify for one?

Qualifying for a 2nd home mortgage.

What’s your credit history like?

Is your credit history bad? – There are options!

If so, we can still assist you in getting a second charge mortgage, however, try boosting it back up in order to help you qualify for a lower rate second home mortgage. Lenders may typically want you to have a high credit score, at around 650.

So, what can you do to boost your credit score?

Read these following tips to help you qualify for your second home mortgage!