Whether you’re dreaming of relaxing on the beach or are looking to find a bit of peace in the mountains, a secondary residence is often an aspiration for many of us. There’s nothing like a bit of an escape at any time during the year; however, summer often finds us looking for the perfect getaway.
Therefore, whether you’re looking for a reprieve from everyday life or you’re simply someone who prefers building their real estate empire, one investment home at a time, understanding your second or investment home mortgage options is important.
In regards to a second home, interest rates for these properties are often similar to what you would find with a primary residence; the only caveat being that they generally require 10% down, and you must qualify for the new home payment—in addition to your existing home/obligations—without using any incidental income you may be able to generate. Plus, since this will be considered a vacation home, in an effort to dissuade buyers from using a second home as an investment property, it also needs to be a sufficient distance from your primary residence (often in a “vacation type” area).
Find out what's happening in Cummingfor free with the latest updates from Patch.
In regards to investment properties, the process tends to be a bit more complex. Years ago, it became a challenge for many to successfully maintain an investment property because, even with reasonable down payments, rental home income often failed to cover the cost of ownership. Today, however, with low interest rates still in the picture, home prices that have yet to fully rebound, and a high demand for rental properties, the investment market remains profitable.
If you’re considering purchasing your first investment property, it’s important to remember that—similar to qualifying for a vacation home—you will need to qualify for the property without the added benefit of rental value. Additionally, with your first home, you will be lacking a history of consistently finding tenants and managing your investment, which means lenders may be a bit more strict. However, once you’ve established yourself and have a history of owning investment homes, you can begin using 75% of the market rent to help qualify for a new loan.
Find out what's happening in Cummingfor free with the latest updates from Patch.
In the end, the real estate market is like a pendulum; yet, no matter the recent trends, property ownership remains a solid, positive investment. Whether you’re looking for someplace fit for relaxation and fun, or you’re looking to score a profit, with the right amount of planning, a second mortgage is always an option.
To learn more, feel free to contact me. I’d love to help you on your way!
Pam Wright | OnQ Financial | www.onqfinancial.com | 404-445-1033
