Have you recently paid off your first home and begun looking for a second mortgage to secure your dream summer home? There’s a lot to know that may not be as simple as getting the keys to a new beach house!
Summer Home Mortgage
Before looking for the best mortgage option to fit your summer home, it’s important to consider a few factors. If your summer home is your primary resident, you could qualify for a low down payment. However, if the property is your second home you may be required to put anywhere from 10 to 15 percent down. The good news is that you’ll get the same tax benefits of a primary home.
Another thing to consider is the qualification of your home. An investment property that’s rented often will pay more interest on a mortgage loan and will have a higher down payment. This factor may change on a state-to-state basis, so do your research before committing to a property. It’s important to be prepared! Expect expenses related to principal, interest, taxes and insurance, vacation property ownership, maintenance and repairs, property management, furniture and houseware equipping costs, and more when you’re budgeting for your mortgage loan.
Summer Home Insurance
Whether you’ve recently purchased a beach, lake, or even a mountain summer home, it’s important to know how to insure your home. Your main home’s insurance policy will likely not cover your second property, and you’ll need to find separate summer home insurance for your summer home. In some cases, homeowners may need to extend liability coverage, meaning if anyone is hurt on your vacation property, you’ll be covered. Insuring your vacation home is also a little different depending on your setting. You may need extra coverage if your house is lakeside property or in an area prone to other disasters such as mudslides, hurricanes, volcanoes, and more.
Independent of your future plans, help us help you enjoy your new summer property! Bright Financial can help you with a variety of loan options and a plan that best fits your situation!
