Purchasing a Second Home
- Author Anita Koppens
- Published June 29, 2008
- Word count 550
When you are ready to buy your second home, it is important to understand how mortgage lenders perceive the risk. Generally, if you are ready to buy a second home you will have enough resources to come up with the substantially large down payment of up to 25% of the purchase price. But, the important thing to keep in mind is that mortgage lenders are aware of the increased financial burden and take this into account when it's time to make a decision. You will need to verify that you can handle the increased expense of two home mortgages without being dependant on a renter. You will most likely pay a higher interest rate on your second home mortgage too.
Understand What Lenders Classify as a Second Home
When you apply for a mortgage on a second or vacation home, your lender must validate that your new property meets the criteria for a second home. Your lender may compare the size and price of the secondary residence to the primary residence. The next thing that your lender may check is the distance of your secondary home from your primary residence. Lenders want to ensure that homebuyers are not using the property as an investment rather than a true second home. That kind of situation calls for an investment mortgage and has more stringent guidelines.
For many second home buyers, the desired property does not meet the requirements to be labeled as a second home by a lender. The situation is different for every buyer and lender and for each circumstance, so don’t give up on buying that second home quite yet. The down payment difference between a primary residence and a second home can be substantial. In most cases, buying that second home is still easier than purchasing an investment property. It will depend on what mortgage you choose, but the more you put down, the lower the interest will be and the monthly payment will be lower as well. Depending on the market trends, some home mortgage lenders may offer second home buyers the same rate and down payment as a primary home. Your credit report will of course be a big factor in your interest rate.
Talk to Your Lender about Your Options
It’s important to ask your lender about financing options for a second home purchase. Your lender will want to know what your plans are for the property. If you are going to keep the property for many years, a fixed mortgage would be a good option. However, if you do not plan to keep the property for a very long time, talk to you lender about an adjustable rate mortgage or a balloon mortgage option. These are good options for people who want to purchase a second home but don’t plan on keeping it for a long time. These options can offer lower interest rates as well.
Benefit from Second Home Purchase
A second home is a great investment because in some cases, all of the interest is tax deductible, just like your primary home’s mortgage. As long as there is space in your budget for a second home, you will be making a good financial decision to increase your wealth. An extra property can make vacations and getaways a delightful experience.
Internet Writer for Dynamic Page Solutions http://www.dynamicpagesolutions.com Explore all EastLake Homes in Chula Vista, CA
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- How to Choose a Title Company: A Step-by-Step Guide for Real Estate Success
- How Architects Are Shaping Sri Lanka’s Real Estate Boom
- Directing Las Vegas Homes for Sale: How Live Better in Las Vegas Guides Buyers to Success
- Understanding the Renters' Rights Bill: Key Changes and Timeline Explained
- Costs of buying property in Spain - IMS Mortgages
- Three Easy Steps to Sell Your San Antonio House Fast!
- Discover Your Dream 55+ New Construction Home Community in the Greater Tampa Bay, Florida
- Article on Mortgage Lenders and New Homes Mortgage Helpline
- The Advantages of Utilising Professional House Removals Services
- Manilva: A Rising Star in Off-Plan Property Investments
- Comparing Removals services-in-wandsworth: Your Ultimate Guide
- Port Orange -- The Perfect Twin Sister to Daytona Beach
- RE/MAX Ace Spearheads Innovative Housing Solutions in the GTA
- Should You Waive the Home Inspection Contingency? Weighing the Risks and Benefits
- Avenir: Embracing Lifestyle and Community in Palm Beach Gardens
- Serbian Real Estate: A Tidbit for Investors
- Discovering Life in Pattaya, Thailand: An In-Depth Handbook for Expatriates
- DEBUNKING HOME REPORT MYTHS
- Don't Let a Financial Hardship Force You to List Your House
- Safe Water Starts at Home
- Don’t let Missing Insulation Lead to High Energy Bills
- Property Investors Amidst Favorable Swedish Krona Rates
- How Real Estate Professionals in Houston Go Above and Beyond for Home Sellers
- Reasons to invest in real estate in Cyprus
- Top 10 criteria to select an Insurance Claim Appraiser
- Comprehensive Home Inspection Checklist for Buyer, Seller, and Homeowner
- DEBUNKING HOME REPORT MYTHS
- North Carolina Real Estate Market: Shifting Market Dynamics on the way?
- Selling Your House in Winter: Effective Tips and Strategies for Success
- Would you like to have a Free House?