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Holiday Home Mortgage - How To Find A Good Rate On A Holiday Home Mortgage

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A holiday home is an exciting purchase, to say the least. However, the prospect of a second mortgage for a holiday home may be less exciting. The good news is that it’s often easy to find a good rate for a holiday home mortgage, but there are some differences between second home and first home mortgages that you should be aware of before signing any contracts.

First of all, mortgage lenders will usually require a policy holder to take out a special form of life insurance known as decreasing term life insurance. This policy will protect your holiday home mortgage; if you die, the amount left on your mortgage will be paid off directly to your insurance company. These policies are usually required on homes purchased later in life to protect the lenders, and home mortgages usually fall into this category.

You should be careful to consider how taxes will be handled on your holiday mortgage. You can usually deduct your mortgage interest, although if you’re buying your third home, this may not be true. If you rent the home part of the year, you will also have to pay taxes on rental income, so don’t depend on this secondary income to cover your mortgage costs without taking taxes into account.

You should also look at a variety of mortgage lenders before taking out a holiday home mortgage. Regardless of the area of the new home, rates will vary quite a bit, and you’ll have a proven record of on-time payments for your first home to show the new lenders. You’ll often be able to get a much better rate on your holiday home mortgage than you’d received for your first home, but negotiation is key. This is easiest if you’re able to gather a few quotes before talking interest rates with potential mortgage lenders.

Finally, realize that paying off as much debt as possible before looking for a second home mortgage will help your chances of getting a good rate. Mortgage lenders hold your credit to a higher standard for a holiday home mortgage, and you’ll make it much easier to negotiate yourself a great rate by keeping your credit score in good order and by diminishing your debt.

Before you buy a holiday home mortgage, make sure that you understand what you’re getting into. Learn about every policy that you look at, and you’ll find it much easier to make a responsible decision about your permanent vacation getaway.

Holiday Insurance Cheap - How to Find Holiday Insurance at Cheap Prices [next] [back] Holiday Short Breaks - Holiday Short Breaks and Weekend Getaways

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