It could be that you’ve found a lovely little place by the sea in your favourite holiday town, or that you want to invest in somewhere that will make you some money in rent.

Whatever your reasons, getting a second home can be as exciting as it is frustrating.
Before you decide to go down that route, here are some factors to consider before making a decision on getting a second home.

I’ve got my mind set on you

If you’re looking to get a second home as a holiday home for yourself and your family, then chances are that you already have a place in mind. Having a second home in an area where you normally go on holiday will take away all the stress of having to book hotels or worrying about going during the peak seasons. A second home is also likely to have extra space for relatives or friends to visit you as well.

However, going somewhere on holiday and living there (even temporarily) are different things. Having a second home means that you’ll be stuck in a fixed place for most of your holidays, so make sure that you choose an area that you know well and are unlikely to lose affection for over time. It would be a shame to get your holiday home and after a few years decide that you don’t like the area.

If there’s a possibility of you renting out your second home to someone else, consider the fact that they are unlikely to have the same tastes as you. Think about proximity to local amenities and locational features such as parkland or a lake to enhance the appeal of the new house to prospective tenants.

Money

Owning one house is one of the most expensive things that you can do, so owning a second home will also feature somewhere near the top of that list. In addition to the extra expenses involved such as utilities, second home insurance and maintenance costs, you could end up paying out more than you expected if you rent your home out to bad tenants.

On the other hand, the extra income that you get from renting out your second home while you’re not there could help to pay for its mortgage, or it can be used to pay for maintenance costs on the house.

If you do decide to rent out your property, make sure that you have the right level of landlord insurance to cover yourself against any unpaid rent or any damage to the building itself.

Time

If you’re thinking of getting a second home purely as a means to lower your holiday costs, then think again. How often do you holiday to this area? The chances are that the costs of getting a second home far exceed any savings that you would make. Unless you’re looking for some sort of investment from the property, or have the disposable income to buy a second home without thinking, then you may want to reconsider your options. Give yourself a cooling off period before you enter into any decisions so you can weight up the pros and cons of getting a second home.

Are you thinking of buying a second home, or maybe you already have? Was it a good investment? Tell us about it in the comments below.

All mortgages are not created equal and getting a great deal with a favourable interest rate can save you a lot of money over the life of the loan.

There are many different mortgages to choose from, so how can you be certain that you are getting the best rate available?

by Flickr's '401k'

Here are some tips for getting a better deal on your mortgage:

Improve Your Credit Score

Did you know that the higher your credit score the better deal you will likely be offered on your mortgage? If you have a bad credit score, improving it will help you snag a mortgage with a great interest rate. To make your credit score excellent, pay all of your bills on time and don’t use more than 30% of your credit card limit on a regular basis. Also, avoid numerous credit inquiries such as applying for too many credit cards which can also affect your score. If you are making large purchases in the months before you apply the lender might question whether you will be able to make all of your payments.

Make a Bigger Down Payment

Save up as much money as possible to make a down payment on the home. One of the factors that determine the interest rate on the loan will be the ratio of the loan to the overall value of the house. The more you pay up front, the more equity you will have in your home. Since the loan is a lower risk for the lender they will reward you with a lower interest rate.

Use a Mortgage Broker

Sometimes it can be advantageous to seek the advice of a mortgage broker, who will help you compare the different products from a variety of lenders. However, make sure that you come to an agreement about their “fees” before you begin, as some will charge you for their services and depending on what they charge you may not actually make a saving.

Just Ask for What You Want

When you are comparing the different mortgages available, ask the bank to put their best offers in writing. Then you can go to the next bank and show them the offer from their competitor. Ask them if they can beat that offer and win your business. You can also ask them if they have any special offers available. Don’t be afraid to haggle with your bank, as sometimes this technique will work and it never hurts to ask.

Do you have any tips for choosing the right mortgage? Tell us in the comments below.

Ever dreamed of buying a house? Well you’re a crazy fool and you should lower your ambitions. Houses are for people with huge sums of cash in reserve. If you don’t own a house now then you probably never will so just deal with it.

Image via alexliivet

It turns out the banks, those lovely awesome banks – whom, sustained by taxes and are very possibly the reason everyone is experiencing really high inflation at the moment and are therefore unable to save – are rationing mortgages even further.

The Bank of England’s study shows that fewer people are meeting lenders criteria for borrowing. It’s all down to falling house prices, the economic climate and fear the fact that the future is even less secure. Banks are just so pessimistic. Whatever happened to that starry-eyed optimism that make them think the boom bubble would never burst?

In reality it may be bad news for those looking to get one, but it’s probably a reasonable position given that handing-out mortgages to people who had little or no means to pay them back in the first place was one of the big reasons the world got into this mess in the first place.

Even those paying mortgages at the moment are struggling to repay them and are living month-to-month, relying on their credit cards as well as those fantastic pay day loans. You know those companies that give you a short term loan with huge rates of interest. Now there’s a healthy way to run your finances.

So, saying the banks should be giving out mortgages to anyone who wants them is of course ludicrous and even hypocritical. However it’s not fair. Nothing about any of this is fair. It’s perhaps a peculiarly British dream but those earning a decent wage should be able to afford there own home.

Anyone trying to sell their house will also be suffering as there will be fewer buyers on the market and the value of their property will more than likely have decreased. It all amounts to a market stagnation.

It seems though, that most will be forced to rent for their own lives while others will take advantage of their parent’s property for longer than is reasonably expected.

So who knows some nice places to rent?

Are you struggling to get a mortgage? Tell us about it in the comments section below.

Image via Flickr

Since the financial crash back in 2008, it’s been a very difficult and frustrating time for first-time buyers to get a foot-hold on the property ladder.  In a strange twist of fate, it was the gung-ho attitude of mortgage lenders pre-2008 that ultimatly led to the financial crash and the difficulties that first-time buyers’s face today while trying to get on to the property ladder.

The main reasons for this difficulty are, that there are 98% less mortgage products available today as compared to pre-2008, the criteria for approving applications are much more strict and the average deposit is now an eye-watering 30% – which is over £35,000 for your average first time buyer.

Many  rightly feel more than a little aggrieved, as raising this kind of money is very, very difficult and is not always a good measure of whether someone can responsibly afford a mortgage or not.

These days around 18% of 18 to 34 year olds are asking for help from the bank of mummy and daddy.  Not everyone has access to a bank of mummy and daddy and for them there are really only two options; take out an unsecured loan or just save.

Around 16% of first-time buyers are considering taking out an unsecured loan to pay for their deposit, but this is a worrying trend.  If your mortgage provider found out you were planning to pay your deposit with an unsecured loan, your application would be declined, as this would be considered a 100% loan.  Interest rates on unsecured loan tend to be quite high, so it really doesn’t make financial sense to fund your house purchase in this way.

Really the only sensible way to get onto the property ladder is to bide your time and save up for a deposit.

A deposit is only one of a myriad of costs faced by any house buyer. There are many other cost’s to be considered too, like stamp duty, solicitors fees, removal vans, utility bills, furniture, renovation and decorating costs.  You really should try and make a detailed analysis of how much money you have coming in and how much you can realistically afford, including a budgeted buffer to pay for unseen costs like emergency roof repairs etc.

Don’t let your heart rule your head.  Research a property properly and make decisions based on solid financial information.  Buying a house you love, but can’t sustainably afford is a recipe for disaster.

There are a few other schemes that can help you get on the property ladder; check out the governments Firstbuy scheme or shared ownership scheme, both of which will help you get on the property ladder without having to save up a huge deposit.

Fundamentally there is no easy way onto the property ladder.  The best advice is to wait, save up a deposit and look carefully for the right house.

Have you recently bought a house, or are you still looking for one? We’d love to here about your experiences in the comments below.

The evidence comes from a study carried out by price comparison website uSwitch, and suggests that singletons carrying the burden of paying for a mortgage, holidays and day to day bills all by themselves are costing themselves a quarter of a million pounds (I thought I’d word it like that just to make the figure sound even more morbid).

The study also claims, rather depressingly, that it “shatters” the illusion that single life is just one big party.

Ann Robinson (no relation to the Weakest Link host, unfortunately), uSwitch’s Director of Consumer Policy said:

“Being single costs a lot and you’re bloody miserable.”

Thanks Ann.

After stating the bleedingly obvious she added:

“You’re having to spend on necessities rather than having fun. £5,000 is a lot of money to lose a year – you could definitely have a great holiday for that.”

Ouch. Well, in honour of the fact I’m thoroughly miserable now, I thought I’d try to write something looking on the bright side of financial life, with regards to all the singles out there.

See, it’s not all bad news. Whilst I’d be the first to admit that after coming to the end of a long term relationship last month my bank account took a hit at first, I highly doubt that the £20 I went out and spent on Morrissey’s back catalog sent me into financial ruin. In fact, I’d go as far as to say that staying in and listening to that for a week within the confines of my bedroom was a far better financial decision than having to go out and pay for dinner for two at a fancy restaurant.

And I’m fairly certain that whoever carried out the research with regards to holidays costing more for someone going with friends or on their own rather as part of a couple has never been away with a partner. After all, anyone who’s ever taken a lady on holiday with them will know that they could have went on their own twice with all the money they spent on food, drink, presents and other luxuries for their loved one.

Plus, Stuart Adam, Senior Research Economist at the Institute for Fiscal Studies said: “The quarter of a million figure depends first on whether you believe their £5,000 a year finding and I’d need quite a lot of convincing that they’d got their methodology right. Then to get from £5,000 a year to a quarter of a million over your lifetime they’ve based it on 53 years alone from 22 to 75. But nowadays people change their status all the time, going into couples and splitting up.”

So it’s not all bad, supposing you’re not single for 53 years at a time you’ll be just fine financially. And if you’re ever in a position where you have been single for 53 years, I’m pretty certain that being skint will probably be the least of your worries anyway.

Chin up!

When Roger came to ask for mortgage for a $385,000 property in Mapua the bank refused. On top of his NZ $190,000 in cash Roger was also going to sell his $110,000 campervan. That would leave the bank with about $90,000 to loan and that’s well more than the %20 deposit they require.

So why did Westpac refuse the mortgage? They pointed out that Roger Griffith is an artist without a regular income and therefore doesn’t qualify at all.

The last straw for Roger Griffiths was when Westpac lost $110 million in a loan to Lane Walker Rudkin. He told press;

“They can lose $110 million with LWR but turn down a normal customer who has never missed a loan payment,” he said. “If they don’t have the trust in me after 25 years, there’s a problem for Westpac.”

Roger’s response was not only to withdraw his entire $190,000 savings but to do it in $20 notes.

After a discussion with the bank they finally agreed to have all the money ready in his local branch for 9am. They counted each note out and provided bags for the artist to takehis money away. He did so and carried to the Nelson Building Society.

Griffith’s reason for picking Nelson was that he felt it was part of the community. His final message to Westpac was;

“If you don’t support the community, the community won’t support you.”