Tips For Holiday Lets – Easier Mortgages

how to mortgage holiday letTips For Holiday Lets – Easier Mortgages

With the increasing popularity of holiday lets as an investment property rather than the traditional buy to let, it is worth looking at the common mistakes and areas that investors often fail to cover off, usually thinking the lender isn’t interested when actually, they are.

When raising a mortgage for a holiday let property the lender will always want to be confident that the owner (borrower) has the ability to manage the property. Providing a few details alongside your income figures can make a huge difference to the speed and your ability to get a mortgage for your holiday let investment.

These details can quickly prove your ability and show you know what your are doing.

Common Mistakes With Holiday Lets

Let’s run through a few of the common mistakes we see. When applying for a mortgage for your holiday let it is worth covering these bits off.

Decent Photos

Research shows you have on average 8 seconds before the viewer will move on from your rental listing. The photo and thumbnail is your opportunity to impress your next booking. Hire a professional photographer as the difference they can make is immense. They have both the equipment and knowledge to get maximum results. If comparing two very similar properties, great images will make the difference. If you are buying a new property put ‘professional pictures’ as part of your marketing plan.

Contracts

Most booking sites will have a standard contract with some tailoring to suit you. That said, not having a solid contract is a big mistake. It leaves you open for claims on deposits, complaints and left with the financial cost of damages if things go wrong.

Have a good contract in place on booking. Keep it simple but ensure it covers dates, payment, security deposit, arrival times, occupancy limits, pet policy, cancellation terms etc.

A decent contract, and showing this is part of your thinking show a lender you know your onions, lenders like that.

how to mortgage holiday let (1)Insurance

Standard lettings or buildings insurance isn’t enough. You need to ensure you have correct holiday letting insurance in place and that it covers to the level required by you and by any lender. Get a quote for property holiday letting insurance and include it in any summary you give to the mortgage provider.

Income

This is why you’re buying, or already have, a holiday let. To get the income and to hopefully gain some appreciation in property values. Lenders will want the holiday letting income broken down into high, mid and low season rates.

One of the best ways to do this is by using one of the booking sites and getting them to provide what they think is a sensible figure. Third party validation of what you project as income always helps, it makes disagreeing with the income very hard to do. Remember also that valuers will do the same thing, so this puts you one step ahead.

There are of course, lots of other considerations but these are some of the common bits that borrowers don’t think they need to consider when borrowing.

Holiday let mortgage lenders will ask for income details, just give a little more detail around those figures as that detail will give the lender the confidence to agree your deal and spend more time looking another applicant who hasn’t done that.

Small changes, big difference.

 

By Dave Farmer

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