Interested in refinancing to buy a second home? Contact me today!
If you’re ready to purchase a second home as an investment property, a vacation get away, or a place to retire in the future, it’s important to consider your options for financing this second home. As an experienced mortgage lender, I have worked with many clients buying their second home and I am here to help you with any of your mortgage and home financing needs. Here’s a few considerations when financing the purchase of a second home:
Avoid purchasing with money from your IRA or stocks
While many people may believe that the best options for financing a second home purchase is through taking money out of their IRA, taking a loan from their 401(k), or selling stocks or bonds, this route is usually risky and generally a bad idea.
Consider a cash-out refinance instead
While you’ll most likely need to take out a mortgage on the second home, putting in a larger down payment has it’s benefits. In order to secure this larger down payment, many use the equity they have built up in their primary home through a cash-out refinance. According to CNN Money, “Home equity is the difference between what a person owes on their mortgage and their home’s market value. For example, someone who owes $200,000 on a home that is worth $300,000 has $100,000 in home equity. [. . .] That value can be monetized through a cash-out refinance. (That’s when you take out a new loan with a higher balance that pays off your existing mortgage and then you can use the remaining balance toward other things, like a second home.)” Using a cash-out refinance option could make the second home mortgage process easier on you in the long run.
- Interest rates may be higher for a second home purchase
- Make sure you have the monthly income to cover both mortgage payments on your primary home and second home
- Use my useful mortgage calculators to evaluate expenses, interest, and other possible savings.
Contact me for your refinancing and second home buying needs!
If you’re ready to refinance to buy a second home, do not hesitate to contact me today for your mortgage needs!