5 Tips for Buying a Vacation Home

Advice for Buying a Second Home Mortgage

1: Know Your Purpose
Why do you want a second home? It seems like a simple question, but understanding your purpose will help you make some important decisions. For example, beach access may be a must-have for a vacation home, but if you’re planning to rent the home, you may want to prioritize having more bedrooms. Identifying your non-negotiables will help you avoid overpaying on features you don’t actually need.

2: Calculate Your Budget
Once you know what you will use your vacation home for, you will want to calculate how much you can afford when buying the house. Keep in mind that the costs of ownership are a bit higher when you aren’t claiming the home as your primary residence. Cake has experienced consultants who are happy to look at your current mortgage and financial situation to help find the best loan for your second home.

3: Plan for Additional Costs
When you move from one primary home to another, you take all of your furniture with you. Second homes, however, tend to have higher start-up costs as you will need to furnish the home in addition to making any small repairs or renovations. Here are a few useful questions to ask before committing to a second home mortgage:

* What new furniture or appliances will I need?
* What are the costs of utilities even when I am not staying there?
* Will I need to hire a lawn care service for the weeks I’m away?
* Are there changes to my homeowner’s insurance if I rent the property?
* What is my annual budget for maintenance at the second home?

4: Find the Right Lender
Partnering with the right lender when buying a vacation home loan is crucial to having a smooth closing experience. Your lender will know how to look at your current financials and advise which loan direction will work best for you. You can purchase your second home in one of several ways:

* A new home loan when you have no other mortgage loans
* A cash-out refinance to pay for the second home
* A home equity line of credit (HELOC) to finance the second home

5: Be Ready for the Unexpected
Owning two homes means double the enjoyment but also double the potential of something unexpected occurring, like a heater going out or storm damage. It is wise to have extra finances in savings to help with anything that may come up with either home. Knowing that you can afford repairs with your savings will provide additional comfort when purchasing your second home.

Get Your Dream Home Today

When figuring out how to buy a vacation home, there are many things to consider. Talk to an experienced mortgage expert to see what makes the most sense given your long-term goals and current life situation. Cake specialists will help guide you through all the pieces of buying your second home and getting approved for your mortgage. Call today to speak with an agent.