When financing a second home, you can choose to take out a second mortgage, extend the mortgage you already have or remortgage your first home.
Buying a second home is a dream for many people. Having a second home in which to spend certain months of the year, telecommuting or obtaining some extra income from it through regular or holiday rentals is an increasingly popular alternative.
Moreover, the province of Alicante is one of the preferred places to settle a second home. According to the latest data published by the Valencian Institute of Statistics based on the Population and Housing Census, the province of Alicante has 1,350,000 houses built, however, only 56% of them are destined for permanent housing. The remaining 44% are houses destined for second homes or empty dwellings.
Below we show you the weight of second homes over the total number of homes built in some of the municipalities in which we work:
| Municipality of Alicante | Total dwellings | Main dwelling | Non-main residence | % Non-main residence |
|---|---|---|---|---|
| Altea | 18.309 | 9.294 | 9.015 | 49.2% |
| Benidorm | 60.479 | 29.550 | 30.929 | 51,1% |
| Calpe | 26.156 | 9.839 | 16.317 | 62,3% |
| Denia | 45.237 | 17.648 | 27.589 | 60,9% |
Despite the interest of both the national and foreign population in owning a second home in the province of Alicante, not everyone has sufficient liquidity to afford this purchase without the need for financing.
If this is your case, here are 3 different ways to finance your second home in the province of Alicante.
Apply for a second mortgage
When financing your second home in the province of Alicante you can apply for a second mortgage, however, you have to take into account that this type of loan usually has certain differences with respect to mortgages for first homes.
- Lower amount financed: banks usually grant between 60% and 75% of the value of the property compared to the 80% they usually grant for first homes.
- Shorter repayment period: if for first homes they usually offer repayment periods of up to 40 years, for second homes they usually do not exceed 25 years.
- Higher interest rate: the interest rate when financing a second home on the Costa Blanca is usually higher than for a first home, which results in higher monthly repayments.
The requirements to access a second mortgage also vary from those for a first home, as they usually require a higher level of income and savings and even request additional guarantees such as other properties or guarantors.
Extending the mortgage you already have
Another option when it comes to financing your second home on the Costa Blanca is to extend your existing mortgage, an alternative that is usually more beneficial than applying for a new mortgage. Extending your existing mortgage is also useful when you need more money to renovate your current home or open a new business.
What can you extend your existing mortgage?
- The amount: you can extend the amount of your mortgage while keeping the same repayment term, which will result in higher monthly repayments.
- The repayment term: another option is to increase the number of years available to repay the money while maintaining the same or even a lower monthly instalment.
- The amount and term of repayment: the last alternative is to increase the capital financed as well as the time to repay it.
Remortgaging your first home
The third way that we want to explain to you to finance your second home in the province of Alicante consists of cancelling the mortgage that already exists on your main home and, once cancelled, to constitute another mortgage on the same property but for a larger capital.
Banks usually make it easier to remortgage the same property than to apply for a second mortgage loan for a second home. Even so, it is necessary to take into account the mortgage conditions at the time (interest rate, repayment period, commissions...) as they may be very different to those agreed for the initial mortgage.
Find your second home on the Costa Blanca
are you looking for a second home on the Costa Blanca? At Hispania Homes you can find the best houses, villas, flats and plots of land in the area of Moraira and the Costa Blanca.
>> Properties for sale on the Costa Blanca <<
Furthermore, if what you are looking for is a second home to invest in by renting, in our real estate agency you will also find all the services that this management requires: tenant selection, document management, legal advice, incident management... All of this with the peace of mind of having the advice of an experienced and consolidated agency in the area.
What return can I expect?
We help you achieve maximum profitability through sales or rentals.
The management of your assets requires real estate services to match. If you are looking for a second home on the Costa Blanca, in Hispania Homes you will find the answers you need.
