Investing in a Vacation Property? Learn What You’ll Need to Have to Get A Mortgage Approved

With approximately one million people having purchased vacation homes in the last year, this type of residence is gaining popularity for those who are interested in a home in a beach setting or a vacation hot spot. However, while a second home can seem like a great purchase and solid investment opportunity, there are different requirements that go into this type of purchase. If you’re considering a vacation home, you may want to be aware of the following financial factors.

The Down Payment Amount

If you currently have a primary residence, you may be aware that you don’t need to put down 20% or even 10% in order to make a home purchase, but things are different when it comes to a vacation home. Because you will be taking on an additional mortgage, there is greater risk involved, and this means you will likely have to put in at least 10 percent. Because of this, many homebuyers utilize the equity they have in their first home to make up the down payment.

About The Credit Score

Most people that have a credit score of more than 500 have the ability to use a mortgage product and purchase a home, but if you’re buying a second property, you’ll need a higher credit score in order to facilitate the purchase. Because there is more risk involved, lenders will want to make sure you’re a good bet. In addition, if you do have a lower credit score, lenders like Fannie Mae may also expect you to put more down to decrease the risk involved for them.

The Income Required

Since you’ve been through the mortgage process for your first home, you’re probably aware that you debt-to-income (DTI) ratio needs to be a certain amount in order to qualify for a mortgage. While your DTI for a primary residence may be a little bit higher since it’s your only payment, this ratio will be lower for your vacation home since it’s higher risk. This means you’ll require a slightly higher income than for your primary residence in order to get approved.

Deciding to purchase a vacation home can be a very exciting concept for many people, but there are a number of different financial requirements that go along with buying another residence. If you’re in the market for a vacation property and are curious about what’s involved, give me a call to get you on the right track – J.P. Cook – 602-320-4253.

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22601 W Mohawk Lane Surprise, AZ 85387

$461,410

4 Beds

3 Baths

2,284 SqFt

Status Active

MLS # 6693500

Property Type Single Family Residence

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Introducing the latest addition to Surprise, is Frontera in Mesquite Mountain Ranch. Available now is this new detached single-level home, situated on a corner next to a park, this charming one-story residence features four bedrooms, two and a half bathrooms, and a two-car garage. Boasting front yard landscaping, granite countertops, a generously sized kitchen island with a single bowl sink, tile flooring, stainless steel appliances, and a gas range, this home is designed for modern living. It also comes equipped with a smart home package, a gas tankless hot water heater, and Deako smart light switches for added convenience. Residents of Frontera, will have access to an array of community amenities, including hiking and biking trails, pickleball and basketball courts and play areas.

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1266 W Sparrow Drive Queen Creek, AZ 85140

$461,173

3 Beds

2.5 Baths

1,967 SqFt

Status Active

MLS # 6681587

Property Type Single Family Residence

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North Creek Community will have you feel like your on vacation all year long. Community amenities include a resort style pool, 2 pickle ball courts, full court basketball, bocce ball, corn hole, fire pits, grilling area, tot lot, walking trails and so much more!! This 3 bedroom 2.5 bath home is great to entertain family and friends. Updgrade features include upgraded white knight granite, gas range, Matt black fixtures, upgraded flooring. Hurry this home is beautiful.

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19625 W Cambridge Avenue Buckeye, AZ 85396

$460,995

4 Beds

3 Baths

2,070 SqFt

Status Active

MLS # 6676007

Property Type Single Family Residence

Price Type --

Explore this exciting Slate home, ready for quick move-in! Included features: a covered entry; an inviting kitchen boasting 42'' upper cabinets, quartz countertops, stainless-steel appliances and a center island; a relaxing great room and adjacent nook; an inspired primary suite showcasing a large walk-in closet and a private bath with double sinks; two secondary bedrooms with a shared bath; a central laundry; a fourth bedroom with an attached bath; a charming covered patio and a 2-car garage. This home also offers 7'' x 22'' stone tile flooring, cultured marble bath countertops, additional windows and ceiling fan prewiring in select rooms, coach lights, front yard landscaping and concrete pavers at the driveway and walkway.

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41108 W Haley Drive Maricopa, AZ 85138

$460,990

4 Beds

3 Baths

2,142 SqFt

Status Active

MLS # 6632233

Property Type Single Family Residence

Price Type --

READY FOR MOVE-IN... This home has 4 bedrooms with a flex space to be used as den or a formal space. We added a shower in the powder room for a total of 3 full baths. Large walk in shower at owner's bath with dual vanity sinks. Stainless steel gas range. Benton ''White'' Birch cabinets throughout the home with 42'' kitchen uppers and roll outs at pantry. AZT Della Terra Quartz countertops in the owner's bath and at the kitchen and on the enhanced kitchen island. Tile backsplash in the kitchen has Colorwheel 4x16 tile. Upgrade flooring includes level 9 carpet in bedrooms/closets and the remaining of the home has DT Cannes Masso 18x18 tile in the great room, kitchen, entry, halls, bathrooms and laundry and so much more.

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