The next question is, how do you choose a holiday home mortgage broker? If you used a broker for the mortgage on your first home, this could be a place to start. But some years ago, most people just went to their bank without realising how much help a broker could be.
Again, if you have friends or family who have used a holiday home mortgage broker, recommendations from them could be helpful. It certainly gives you confidence. But you don�t know if they asked the right questions in the first place. So in order to make sure you find the right broker you need to know the right questions to ask.
� Market access. Many say that you should ask a broker �Are you whole of market?� However, this doesn�t necessarily provide the right answer. A broker can legitimately claim to be �whole of market� while operating from a limited panel of lenders, provided he/she reviews the top deals every two months. Therefore a better question to ask a holiday home mortgage broker would be �Could you at this moment source me a holiday home mortgage from any UK lender?� The broker should be able to answer �Yes � apart from the few lenders who never operate through brokers�. Otherwise try someone else..
� How do you get paid? Brokers can be either commission based or fee based. If you want the best deal from your holiday home mortgage broker, look for one that is fees-free and whole-of-market. However, if you want to be certain that your holiday home mortgage broker is completely unbiased, find one who calls him/herself �Independent�. Brokers cannot use the label �Independent� unless they offer an option to charge fees only, with any commission rebated.
� How much? If the holiday home mortgage broker does charge fees, ask �How much?� and �at what stage?� If the fee is more than 1%, find someone else. Likewise if they expect the bill to be paid at any stage before completion � what happens if the deal falls through?
The right holiday home mortgage broker can make all the difference to whether your holiday home purchase goes smoothly. And don�t worry about seeming nosy. A good broker will want to help you and will be only too happy to answer your questions.
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Sean Horton is a Director of Holiday Let Mortgages who are a holiday home mortgage broker.