There are many reasons why you would be in the market for buying a second home. It may be time to upgrade to a new house, while maintaining your first home as a rental property. Some people want a vacation home for quick trips and weekend getaways. Some people want to buy a second home to have so that they can live there during retirement. Some people see a second home purchase as an investment that they plan to buy to rent or renovate and flip. Whatever your personal reasons are for buying a second home, there are a lot of things you’ll want to know and having the right experience in your corner can truly make all the difference. If you’re ready to buy your second home now, contact Stephen White, he is ready to help you make all your real estate dreams come true. If you are just looking for some additional information for now, here’s some tips to help make purchasing your second home a big success.
Quick Tips for Buying a Second Home
- Clearly define your goals. Having a definiteness of purpose in your plan will help you get focused on the pros and cons, and what you ultimately wish to accomplish with buying your second home.
- Set your budget. Buying a second home can be a lot like buying your first, but some essential requirements like insurance and mortgages will be more stringent, and requires thoughtful planning.
- Determine Financing. Will you need to get a second mortgage or will you be making an all cash offer? Determining your financing and getting preapproved will help speed up the final step in getting your second home.
- Find your Second Home. You’ll want to work with a realtor experienced in helping people buy their second, third, and more homes, which is why when you work with Stephen White he can help you navigate through everything you need to know about buying your second home. Working with Stephen, you will not only find the home you are looking for, but you can also save lots of time and money in navigating the real estate landscape to find and own your next dream home.
Determining Your Budget and Financing to Purchase a Second Home
Buying a second home can be a lot like the first home you purchased, but there are a few differences to consider. Like your first home, you will be required to make a down payment and regular mortgage payments, unless you are planning to make an all cash offer. However, unless you are paying in all cash, your down payment requirement for your second home is going to be higher. The reason down payment requirements are higher is due to the fact that most mortgage lenders view a second home purchase as having more risk. The same logic is also often applied to interest rates as well.
Like your first home purchase, your lender is also going to make sure you can meet the debt-to-income (DTI) ratio, which in most cases for a second home is at least 43% or less to get approved. A quick way to estimate your DTI is to add up your monthly debts you pay and divide it by your monthly pre tax salary.
Most people require obtaining a mortgage for their second home, which is why it is important to get pre approved as soon as your budget is in order. This is also because the process for obtaining a second mortgage can take more time than your first mortgage, in addition to the stricter requirements.
Finding Your Second Home
Once you have a preapproval from your lender you are ready to find your second dream home. Working with the right real estate agent, can truly be the difference in expertly navigating and negotiating your next real estate transaction. Stephen White has years of experience in both commercial and residential real estate, and can help you avoid the pitfalls in buying a second home and help you own a second home that you’ll love.
These days, thanks in part to technology and market factors, the real estate market moves more quickly than it ever has before. This is why it’s so critical to work with the right agent. Stephen knows the ins and outs of the buying process, is technologically savvy, and can help you get your second home fast while making the entire process intuitive and easy. So if you are interested in buying your second home as an upgrade, vacation property, retirement house, or investment in Southern California, get in contact with Stephen White today!
