How To Buy A Second Home
If you are thinking of owning a vacation home, knowing how to buy a second home is a must. Although buying a second home seems like a very simple and straightforward process, there are still plenty of things you need to consider before doing so. You can possibly get yourself in trouble if you don't do it the right way. The following instruction will show you how to buy a second home.
To buy a second home, you will need:
- Pre-approval letter
- Your budget
- Your second home criteria
- Find out the purpose of your second home. The first step to buy a second home is to understand what makes you want a second home. If you have more than one reason, list all of them on paper. Afterwards, write down all your second home criteria such as its location, size, number of bedrooms, homeowner association fees, property taxes, etc. Know your budget if you plan to pay for the second home by cash. For home financing, you must get a Pre-approval letter from a lender for the amount you can qualify to borrow. Note that whether your credit score is great or acceptable, you will get a much higher interest rate than a regular home. The lender views the entire situation as an investment, regardless of what you want to do with your second home.
- Research your ideal second home. In order to buy a second home, you should do some homework based on your criteria. You can begin the search on the Internet. Depending on the location for the ideal second home that you want, you might need a out of town trip if it is not in your current hometown or state. Traveling might sound like a waste of money; however, you should do so if you want to have a practical idea on whether you like the second home's surroundings or not. Make sure to bring paper, pen and camera along with you for note taking purposes on the second home(s) that you are interested in. By conducting the research, you will learn more about the reality on being a second home owner. For example, you may think the maintenance costs are very cheap, but actually they are not! Maybe you can easily afford the mortgage; however, you might have trouble paying the other expenses.
- Get assistance from a real estate professional. Once you have decided which second home you want, you should work with a realtor when buying a second home. Whether the listing is a For Sale By Owner or owned by a real estate company, it is strongly recommended to have a realtor as your buyer's representation. You might call yourself an expert due to all the homework that you have done. However, more questions may arise as you are moving forward with the process. Your realtor will explain all the pros and cons on buying a second home with you. There is a chance that you will change your mind just in case you have finally realized that this isn't the right thing to do. Let's say you love to have a beach house for vacations. But, these two things gradually come up in your head: The flood insurance for this beach house is super expensive due to all the previous hurricane damages. Your husband must stay home all the time due to a medical condition.
You should be able to buy a second home with these three steps. Buying a second home has known to be a big decision. At the end of the day, you will be living happily ever after by making the right decision.