Should you buy a holiday home?

To many people, owning a second property is a sign of wealth, I have enough money to own 2 properties and use them! However, due to rising salaries and house prices more people than ever are able to afford a second property to enjoy as a holiday home. Some will prefer to holiday at home in the UK whilst others are more adventurous, buying in Europe or even farther away.Imagine being able to drop everything at a moments notice and travel to your very own holiday property. Somewhere that is just right for you to enjoy.If you do not have sufficient savings or investments to afford to purchase a property you could look to your own home for help. By remortgaging your own home and raising capital you can then purchase the new second property outright. Or simply raise a mortgage on the holiday home with a 15 to 20 deposit from you. Holiday home mortgages are possible for overseas properties but be wary of who you are dealing with and currency fluctuations. It is possible for your mortgage to grow in size if currencies move the wrong way.Of course mortgages in the UK are a lot easier to come by and to understand. Most lenders will be happy to offer a mortgage on a holiday home, providing you have sufficient income or security. Additional security would be other properties, investments or a business the lender could place a charge against. Holiday homes that are located within holiday parks are a little more difficult (but not impossible) to secure finance on though.If you intend to let out the property to holidaymakers then you will need a holiday let mortgage and appropriate holiday home insurance. Not all lenders will be happy that your lovely holiday home will be let to strangers so best to check first. Having to let out the property so you can afford it is totally different and you should think long and hard about whether this is prudent. Think about what would happen if interest rates increased or you could not let the property? How would your finances cope then?To most people, a holiday home is somewhere for the family to enjoy and escape the rat run. It is not intended to be an out and out investment but a lifestyle decision to improve the quality of life and standard of living. In this respect, many owners will need to contribute to the running costs from their own income. Items like insurance, utility bills and maintenance need to be paid for.If all goes well, you will own an appreciating asset that you and your family can enjoy year after year.

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