You might be under the impression that second home financing is impossible these days. All mortgage lending has become tougher, but knowing what the lender is looking for will help. Right off the top, that includes a strong credit score and a healthy down payment of 20%. You’ll also want to know the general underwriting guidelines. We have the basics for you right here:
1. Your second home must be a must be a reasonable distance from your primary residence. Lenders use a rule-of-thumb distance of one hour away or more. If your primary residence isn’t an hour away, a second home that includes water rights, or other deeded recreational amenities, may satisfy the lender.
2. Your second home cannot be used as a rental property. Your vacation home must be for your own use. Otherwise the lender will consider it an investment property, which has different lending guidelines.
3. Your second home cannot be left vacant. You must occupy it for at least a portion of the year. Seasonal use is fine, as is weekend occupancy.
4. Time-share properties are not eligible for second home financing.
5. Your second home must be a single family unit. Condos and single-family homes are the norm. No duplexes or multi-family homes would be eligible, even if you occupied one of the units on a seasonal basis. The lender would still view these as rental properties.
We encourage you to use the above tips in discussions with your lender! All of us at the Coldwell Banker Deep Creek Realty team stand ready to help you find the perfect home. If you have questions about living on Deep Creek Lake, or buying a second home, we have the experience and resources you can trust. There are wonderful vacation homes on the market right now and we’d be happy to show them to you. Contact us today to begin your Deep Creek Lake home search!
Wishing you all the best during the holidays and the New Year,