If you can't get the thought of that relaxing beach break or that exhilarating ski trip off your mind, it may be time to think about purchasing a second home for family vacations. But a vacation home is not the only reason to buy a second home. You may want a condo in a city you frequently travel to for business to ease the hassle of booking hotel stays. Or, you may want a better school district for your kids.
Whatever your vision of a second home is, it's time to act. Taking the first step can be daunting, but it's not as complicated as you think. Achieving your dream of owning a second home begins with some of the same simple financial practicalities as your first home purchase, although some standards are higher.
- When purchasing your first home, have enough cash on hand for a down payment.
- Your credit score must be good enough—generally, lenders expect it to be higher than is required for a first home loan.
- Keep your debt low—once again, the standards for second home loans are generally stricter to account for the greater risk involved to lenders.
- The greater risk to lenders means you’ll likely face higher rates.
You’ll have to make decisions regarding other financial goals and priorities in your life—but you'll also have a prize in sight that makes it all worthwhile.
As you embark on the journey to purchase your second home—whether it’s a bungalow in Vermont or a beach house in the Carolinas—it’s important to have a trusted adviser to help you create a solid financial future for you and your family. You’ll need someone who can help you understand the impact of mortgage payments, property taxes, insurance (particularly flood insurance), maintenance, and HOA fees on your overall financial picture, helping you make the best possible decisions for your financial situation.
There's a clear choice. At First American Bank, our loan officers work closely with our wealth management group to help you make sound financial decisions and formulate an intelligent action plan. We provide multiple options based on your situation and needs with some of the best financing available at First American Bank for second home purchases.
Other financing options are available if you've accumulated enough equity on your first home. A cash-out refinance from your current home might cover your first mortgage and the cost of your second home. Instead of two mortgage payments, you'll only make one.
A home equity loan, also known as a second mortgage, allows you to have your loan secured by the equity you've accumulated in your primary home. A home equity line of credit (HELOC) is similar but establishes a line of credit that you use to purchase your second home. As you make payments on your first mortgage, your credit is replenished.
There are many options to help you achieve your dream of second-home ownership—but which one is right for you? The loan officers at First American Bank will work with you to select the right option for you. Before you know it, you'll feel the sand between your toes (or the snow under your boots).
Whichever funding option you choose, First American Bank has products available for you to meet your needs. We're experts in second home lending, and our rates are lower than our competitors.
When you awake to a magical sunrise in your gorgeous second home, you'll know you made the right decision. Set yourself up for success with First American Bank. Contact our knowledgeable mortgage lenders today to learn more and develop a plan to purchase your second home.
