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How to Buy a Second Home Using Secured Home Loans?

Are you considering buying a second home?

The number of Brits owning multiple properties has skyrocketed in recent years. Recent research from estate agent Knight Frank suggests that a quarter of a million Brits own a second home in the UK. It is also estimated that over a million British residents own a property overseas and may more own a number of ‘buy to let’ investments.

So, if you are looking to buy a second home, using secured home loans could well be the answer.

Why Buy a Second Home?

There are various reasons why you may be considering buying a second home:

  • A second UK property for use either as a city flat or a country residence
  • An overseas holiday home
  • A property which you can use for vacations and then rent out for the rest of the year (either in the UK or overseas)
  • A ‘buy to let’ investment

With well-publicised news stories about the underperformance of many people’s pensions, buying a 2nd home is an increasingly popular way for Brits to save for their retirement.

Financing a Second Home

Once you have decided what your plans for the property are, very few of you will be lucky enough to have enough cash in the bank to buy a second home outright. So, the majority of buyers will have to finance the purchase of their second home, whether it is in the UK or overseas.

Many people choose to take out a mortgage on the second property. This can either be arranged on a residential basis (if you plan to use it yourself) or on a ‘buy to let’ basis if you plan to rent out the property. Foreign mortgages are also available if you plan to buy a 2nd home in another part of the world.

However, even if you take out a mortgage on the second property, you will still need to find the deposit.

Funding a Deposit or the Entire Purchase Using Secured Home Loans

A secured home loan allows you to borrow money based on the equity in your own home. The amount you can borrow typically depends on the valuation of your home, the equity that you have, your income and outgoings and your credit rating.

Secured home loans allow you to borrow cash, which you can then use as the deposit for your second property purchase (the mortgage on the home itself will fund the remainder). This method may allow you to buy multiple holiday homes or rental properties as you can fund a number of deposits using the cash raised from your secured home loan.

Alternatively, if there is plenty of equity in your home, you may be able to borrow sufficient funds to purchase the second property outright. This is another popular method, particularly if the home is overseas and you do not want the risk of taking out a foreign currency mortgage.

So, whether you are looking to buy a city apartment, a country retreat, a Spanish or Italian villa or a ‘buy to let’ investment to help fund your retirement, a second home is a great investment. And, secured home loans are the perfect way for you to use the existing value of your main home to fund this purchase.

To use your home to raise money at a competitive APR, please fill this homeowner loan form.

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