What a Holiday Let Mortgage is and the Benefits of Getting One
It may have always been a dream of yours to have the money to buy a second home. Getting a holiday let mortgage will help you to purchase a holiday home as an investment. Read on to discover more about what a holiday let mortgage is and the various benefits of getting one.
What is a Holiday Let Mortgage?
Traditional residential mortgages don’t permit you to rent out a property whereas holiday let mortgages enable individuals to purchase property that will then be let out to holidaymakers on a short-term basis for profit on the rental market. Anyone getting a holiday let property, therefore, must think about whether the place is lettable. A holiday mortgage differs from a buy-to-let mortgage because the property in question has to be available for people to let as a holiday home for a minimum of 210 days during the year.
How Much am I Allowed to Borrow for a Holiday Let Mortgage?
When applying to holiday let mortgages, you have to provide a minimum deposit of 25%, which is a much higher deposit than is required for standard residential mortgages. The lender looks into the rental income you are going to generate over a year and whether this will comfortably cover the mortgage. If you are looking to get your hands on a holiday let mortgage from a reliable lender, a specialist holiday let mortgage broker like House and Holiday Home Mortgages can help you find the right deal.
The Benefits of Getting a Holiday Let Mortgage
There are loads of benefits to getting a holiday let mortgage. These include:
Provide You with an Extra Source of Income
One of the main benefits of getting a holiday let property is that you can use it as a worthwhile investment and as a way of obtaining a valuable extra source of income. Per annum, a holiday let property located in a popular town with tourists and holidaymakers should be able to generate a lot of income and have a constant stream of guests. In tough economic times, a holiday let can prove to be a reliable stream of income that can help you out immensely.
You Can Potentially Make More Money with a Holiday Let
Whereas buy-to-let properties are usually let for 6-12 months on an assured short hold tenancy, holiday lets can be let out for days at a time to holidaymakers. If your per-day prices are pretty high and the holiday let is popular and has guests paying to visit it most days of the year, you can generate more money through a holiday let per annum than with a regular buy-to-let property. Getting a holiday let property can therefore be a good investment and a wise financial decision.
Holiday Let Properties Often Come in Good Condition
Holiday let lenders are often also residential mortgage lenders. So, they want to lend mortgages for properties that anyone can buy and for any purpose, not just holiday let investors. And holiday let properties that you are able to get a mortgage through a lender should therefore come in good condition and be lettable.
Tax Relief
Another benefit of holiday let mortgages is that you are able to claim tax relief on mortgage interest since HMRC classes holiday lets as a business.
Getting a holiday let mortgage can be a sound decision. Just be sure you will generate enough money throughout the year to cover the mortgage.
