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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818 S 122nd Lane
Avondale, AZ 85323
$459,900
4
Beds
3
Baths
1,914
SqFt
Status
Active
MLS #
6694740
Property Type
Single Family Residence
Price Type
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Stunning meticulously maintained golf course lot offers 4 bedrooms 3 baths, plus an office. Dive into relaxation with a sparkling swimming pool and spa, while enjoying the elegance of shaker cabinets, 42 inches tall, and newer shutters throughout. All appliances included for your convenience.
15553 W Ventura Street
Surprise, AZ 85379
$459,900
4
Beds
2.5
Baths
1,961
SqFt
Status
Active
MLS #
6700259
Property Type
Single Family Residence
Price Type
--
Perfect move in ready home waiting for you to call it HOME SWEET HOME! Open floor plan with modern yet warm tones throughout. Upgrades galore! Open great room at the entry leading you into the modern kitchen built for the chef of the home! The kitchen has a large island, beautiful backsplash and stainless steel appliances! Loads of natural lighting throughout the house. Low maintenance yard in the front and back to enjoy all of your desert days and nights! This home is truly ready for move in!
10436 E Peralta Canyon Drive
Gold Canyon, AZ 85118
$459,900
3
Beds
2
Baths
2,203
SqFt
Status
Active
MLS #
6696727
Property Type
Single Family Residence
Price Type
--
INTEREST RATES GOT YOU DOWN? THIS IS THE HOME FOR YOU!! SELLER OFFER 2:1 INTEREST RATE BUY DOWN W/ FULL PRICE OFFER. *** Ask your Agent for Details on the Savings *** Discover the ideal home in the serene Peralta Preserve community, offering a rare combination of comfort and affordability. This welcoming single-story house boasts 3 bedrooms, 2 bathrooms, and spans a spacious 2,203 square feet. Recent updates include new flooring and fresh paint, creating a move-in-ready space that feels brand new. The home features a two-car garage, and the HVAC system is only four years old, ensuring year-round comfort. The layout includes large formal living and dining rooms with vaulted ceilings that enhance the sense of space, alongside a cozy family room complete with a gas fireplace perfect for relaxing evenings. Step outside to enjoy a covered patio and low-maintenance desert landscaping, all set against the backdrop of stunning mountain views. The community's gated entrance adds an extra layer of security and exclusivity. Best Value in the area priced at $208/sf, this property represents a fantastic opportunity to live in a beautiful natural desert setting without sacrificing convenience or budget. Whether you're entertaining guests or enjoying a quiet moment, this home offers both functionality and a touch of elegance. Don't miss out on this great value in a picturesque gated community!
1620 N San Marcos De Niza Drive
Sierra Vista, AZ 85635
$459,900
3
Beds
2
Baths
2,048
SqFt
Status
Active
MLS #
6698898
Property Type
Single Family Residence
Price Type
--
Wonderful home in the desirable Ranchos Carmela Estates subdivision! Amazing natural light welcomes you into this home. A must-see kitchen, opened to the dinning room and living room. The primary bedroom has a walk-in closet, bathroom with double sinks and a stunning shower — check out those views from your bay window! Adjacent to the laundry room, there is a large room with a whole wall with built-in cabinets — never run out of space! The other rooms are located on the other side of the house, allowing you some extra privacy! Enjoy quiet evenings before the fireplace or relaxing on your new incredible hot tub, complemented with a struggle free cover — you can open and close it almost single-handed! Save on your electric bill with the solar system fully paid off! See this home today!
