Purchasing A Second Home
Have you been thinking of purchasing a second home? Maybe you are looking for a vacation home or an investment property and are wondering about finance options. While this can be a great opportunity, a second mortgage can actually be more challenging than getting your first home mortgage.
A mortgage on a second home has a higher set of standards than the initial home loan. Banks tend to think that your finances are stretched thinner and therefore you might be a higher risk. Your loan could be harder to close and there is a good chance your interest rate will be higher.
How To Be An Ideal Borrower
Being a low risk borrower and having your finances in order before you even look for a home is ideal. You need to make sure that you are not risking your future for a second home.
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Banks want to know that if any emergency arises, you can still pay your bills and then have some left over. This means that you should have debts paid down as much as possible to have a low debt to income ratio.
Keep The Risk Low
Be careful when using your primary home as collateral. You could be putting both homes are risk if any unexpected events happen in your life. While your home could your greatest asset, make sure that you will be able to pay both mortgages and not be foreclosed on. You should speak with your financial adviser to ensure that you are being reasonable in your thinking. They will have unbiased advice on how you should proceed.
If A Second Home Is Right For You, Get Started Now
Buying a second home could be a great investment for you, emotionally and financially. If the rewards outweigh the risk, then you should seek a mortgage lender to get you started on the process. Soon you will have your feet up at your vacation property or on your way to making money with your investment property.
Get in touch today!