Have you considered buying a second home?

A secondary property can be a great investment in your future

Reasons to buy a second home:

  • You want a vacation home, simply as a regular getaway or as a spot where you'll eventually retire.
  • You need a commuter home, because you work too far from your primary home to make a daily drive or train trip tenable.
  • You want to invest in real estate by buying a second home.
  • You're buying a home for a family member, perhaps to keep your parents close by or to give your college student a campus-adjacent pad.

Things to take into consideration:

  • 90% Loan to Value
  • All 50 States
  • Short-Term Rentals
  • Full Investment Conversion after 1 year
  • Owner Occupied Rate

 

***The tax implications of owning a second home differ depending on whether it's a second home or an income-generating property. It's important to consult with a tax professional to the tax implications. If you rent your second home for more than 14 days out of the year, it's considered an investment property by the Internal Revenue Service.

Second Homes VS Investment Properties

Second Home

A second home is a one-unit property, occupied for part of the year, in addition to your current home. Lenders will require proof the property is at least 50 miles from your current residence or in a resort area (i.e. waterfront) to be considered as a 2nd home.

Investment Properties

An investment property is owned but not occupied by the borrower. All homes over 1 unit that are not primary residences are considered investment properties.

Financing Differences: Second Homes VS Investment Properties

Down payment

Second home: 10-20 percent
Investment properties: 15-30 percent

Cash reserves

  • Second home: Two months of payments in cash reserves
  • Investment property: 6-12 months' worth of cash reserves or rental income
  • Second home: You must qualify based on your own income and debts
  • Investment property: Up to 75% of expected rental income can be considered for qualification purposes

Interest rates

  • Second home: Can be slightly higher than primary residence rates, but are often on par
  • Investment property: Tend to be slightly higher than primary residence and second home rates

Income

  • Second home: You must qualify based on your own income and debts
  • Investment property: Up to 75% of expected rental income can be considered for qualification purposes