Buying a Vacation Home?
A cottage at the beach, a cabin in the mountains, or a home by the lake. A place to gather with friends and future generations, and to just simply unwind. Who hasn’t dreamed of escaping to that home-away-from-home on weekends and for family vacations. American Mortgage Corporation can help make that dream a reality with affordable vacation home financing.
Coming up with a budget for buying a vacation home involves looking at several different elements. Consider the upfront costs such as the down payment, financing expenses, furnishing and outfitting the home, and any repairs that might be necessary. Ongoing costs will include the monthly principal and interest payment, as well as insurance and real estate taxes. In addition, there will be the expense of utilities, property owners association dues (if applicable), maintenance and repairs, as well as travel to and from the home.
Qualifying for a Second Home Mortgage
Because many vacation homebuyers already have a mortgage on a primary residence, it may be somewhat more difficult to qualify for the second home loan. Applicants must be able to document enough income to show that they can afford both properties and have enough in savings or other accessible assets to cover several months’ worth of expenses on both homes.
Otherwise, the mortgage process is very similar to financing a year-round home. Loan approved will be based on an evaluation of the borrowers’ income, assets, credit score and history, other debts, equity position, and other factors.
Available Loan Programs for Vacation Home Financing
Many of the mortgage programs used to finance the purchase or refinance of a primary residence can also be used as a second home mortgage. With American Mortgage Corporation, you can choose from 30 year, 20 year, 15 year, and 10 year fixed rate mortgages or 5/1, 7/1, and 10/1 adjustable rate loans.
Choosing the Right Property for You
Which is the right home for you? Many factors will likely come into play when making this decision. Consider your budget, preferred location, the style of home you like, the amount of space you need, and your favorite features in a home.
There may be several property types available depending on your location.
- Single Family Homes: A stand-alone home, often with a surrounding yard, is a popular choice for the privacy it provides. It’s what many people envision when they think of “home.”
- Mobile or Manufactured Homes: These are often an affordable option and great for those looking for a smaller home. Mobile homes tend to be more environmentally friendly than stick built homes as well.
- Multi-Family Homes: A house with two to four different units can be a great choice for large families or for those who would like to rent out the additional units to generate income.
- Condos: Home buyers often select condos for their affordability, reduced maintenance, and because they are looking for a smaller living space.