Your How to Guide to Buying A Second Home
Have you ever dreamed about owning a lakeside cottage for weekend getaways? Or maybe a mountain bungalow that also happens to be closer to family? If you thought yes, then you’re dreaming of owning a second home! Not only can a second home provide an oasis from normal day to day life, but it can also be a great investment opportunity. You can earn extra income by renting out your second home when you’re not using it (think AirBnB). Whatever your dream, this article will walk you through steps to take to make it a reality.
First things first, as you begin to think about purchasing another home, it’s important to have a clear goal in mind for it’s use. The good news? You have options!
Second Residence: Do you have a job that requires you to travel frequently? Or maybe you have family that you often travel to see? A second home as a residence may be more comfortable than a hotel and provide a level of consistency if travel is required often.
Vacation Home: Do you have the travel bug? A favorite place you love to visit any chance you can? If so, using a second home as a vacation home sounds right for you!
Investment Property: Many homeowners will use a second home as an investment property if they are going to be in the home sporadically, particularly if it’s in a tourist destination. Although there are some requirements since this loan isn’t intended solely for an investment property. To qualify as a second home the property cannot be rented out for more than 180 days in a calendar year and you must reside in the home for either 14 days or 10% of the days the property is rented, whichever is greater. Be sure to consult your local mortgage lender to best understand the parameters and what loan type best fits your situation.
Now that you understand how you want to use your second home & have a grasp on the financing, it’s time to think about the location. You want to have an idea of where you want to own a second home, whether it’s nearby or miles away. Knowing the location will be crucial in finding a local real estate agent and mortgage broker that can help you – which is your next step! Once you’ve decided on the best location, it’s time to assemble your team and ensure you have a top agent and local mortgage lender working for you.
Taking on a second mortgage is no small accomplishment and the requirements for a second home are stricter, because second homes are risker for lenders. One example being that a higher down payment is required. It’s important to understand first if you can afford a second home, that’s why it’s so important that you have a trusted local mortgage broker on your team to help.
Once you have your trusted real estate agent & local mortgage broker – it’s time to get pre-approved and start the hunt for your dream second home!
For more information, chat with us at callhallfirst.com or give us a call at 866-Call-Hall.