X
Free Mortgage Information Kit
X
Free Real Estate Buyer's Kit
Get a FREE Loan Quote
(800) 927-6560

Second Home - Vacation Home

oceanOwning a second home or vacation home is a dream that many people have but few ever achieve. At California Mortgage Advisors Inc., we are fully committed to helping our customers bridge the gap between financial fantasy and reality.

For many, the idea of owning a second home never makes it out of the pipe dream stage. As such, they never fully explore the particulars of a mortgage for a second home. This means they never realize how close to owning a second home they may be based on their current financial situation. Our Mortgage Advisors are available now at (800) 927-6560 to help borrowers work through the steps necessary to obtain a mortgage for a second home.

Financial Benefits and Additional Costs of Owning a Second Home

The benefits and associated costs of owning a dedicated rental property are fairly obvious. Homeowners receive rental payments that allow them to generate home equity and additional income when the rental rate exceeds their mortgage payment. In return, they assume the maintenance and upkeep costs associated with home ownership. They also assume the stress, responsibility and legal liability associated with renting a property. However, the benefits and costs of owning a vacation home are not always as obvious.

Seasonal Rental Opportunity

A vacation home will never function as a rental property in the same way that a dedicated rental home will. However, depending on size, location and vacation season, renting a vacation home for even small portions of the year can go a long way towards offsetting expenses. The decision to rent a vacation home for a significant portion of the year could even result in a positive cash flow.

Increased Opportunity for Property Appreciation

No property is recession proof, and property values are never guaranteed to increase. Property appreciation is based on numerous factors often outside of a property owner’s control. However, a vacation home is the rare luxury item that has the potential to increase in value regardless of usage volume.

Insurance Considerations

Depending on the location of a vacation home, specific types of insurance may be necessary as part of the loan agreement. The most common form of additional coverage is flood insurance for a home located near the beach or other large body of water. However, insurance premiums also increase as a result of occupancy status and the owner’s geographic proximity to the home.

This is not a comprehensive list of the additional costs and benefits associated with owning a second home. CMA’s Mortgage Advisors are available to work with borrowers to understand the unique benefits and challenges of owning their particular second home.

Loan Application Process

One of the advantages of a mortgage for a second home is that the process will be extremely familiar for anyone who has ever purchased a home using a traditional mortgage. The steps include the usual financial considerations such as a credit check, detailed examinations of financial history, asset review and expense report. It also includes a detailed examination of the property itself including a full inspection and appraisal.

Loan Terms

Again, the loan term options for a mortgage to purchase a second home are virtually identical to those for purchasing a primary residence. Borrowers have a range of potential down payment options, variable or fixed interest rate options, and options regarding closing costs and associated fees. At CMA, our primary objective is complete customer satisfaction.

The one significant difference between the mortgage for a primary home and a second home is borrowers may use the equity in their primary residence as a resource when purchasing a second home. This includes using a home equity line of credit to pay everything from the closing costs to the down payment on the second home. In some instances, the equity may be sufficient to purchase the second home outright. CMA’s Mortgage Advisors will help borrowers select loan terms best suited to their financial objectives and current financial situation.

California Mortgage Advisors Inc. has been helping customers purchase the home of their dream for since 1993. We understand not every borrower is looking for the same home or the same type of loan. Our Mortgage Advisors can assist customers in selecting the best loan for their first home purchase, second home purchase, or refinance. When you are ready to start the process, apply online here or contact one of our Mortgage Advisors at (800) 927-6560.