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3 Quick Guide to the Vacation Home Loan

Figure Out How You’ll Use the Property. If you don’t have a permanent home, the vacation home can become your primary residence. If the purchase price isn’t more than lenders’ loan limits, you can qualify for a vacation home loan with a 3% down payment and reap the tax benefits of home ownership. If you’re buying a second home, you usually must put down 10-15% to secure the loan. The same tax benefits apply as they would a primary residence. You can also rent out the property part or full time to lighten the load of mortgage payments. An investment property loan will increase interest rates and the down payment.

Get an Agent. Finding a knowledgeable real estate agent is an essential part of the home-buying experience. An agent will know the local market and have contacts with any inspectors or contractors you need.

Preapproval. Mortgage preapproval shows sellers that you’re ready and able to buy. Get your preapproval one or two months before your ideal purchase date. Applying to multiple mortgage lenders will not affect your credit score if you submit the applications within 45 days.

Requirements for vacation home loans include:

Debt-to-income ratio: For vacation property, borrowers should expect to finance with a 43% debt-to-income ratio or higher.

Credit score: For a vacation home, you’ll need a credit score of at least 640.

Reserves: Vacation property typically requires reserves that equal monthly mortgage payments between two and six months.

Pros and Cons of Purchasing a Vacation Home

Before going forward with a vacation home loan, weigh the pros and cons to see if the purchase is something you can afford.

The Pros:

It’s yours: Owning a vacation home means you can come and go as you please without worrying about vacancy or availability; you can escape on weekend getaways or let friends use it when they want to get out of town.

Investment: Putting your money into real estate is a great way to see an investment grow in value.

Rental income: Vacation rental properties are a great source of extra income.

Vacation savings: Reduce vacation costs by eliminating nightly hotel rates and eating at home.

The Cons:

Monthly mortgage payments: Taking on a second mortgage may not be realistic.

Expenses: Owning a vacation home makes you responsible for all taxes, utilities, insurance, repairs, and maintenance.

Depreciation: Your investment may not necessarily increase in value.

Single location: Your vacation home only allows you to visit one town or area.

Partner with Mortgage Consultants Group for Your Vacation Home Loan

If you’re looking for vacation home loan options, Mortgage Consultants Group is here to help. Call (916) 669-1682 to speak with our experienced and knowledgeable staff today!

Choosing a home loan is one of the biggest financial decisions you will make, which means choosing a mortgage company is as well. How do you find the right mortgage company in Rancho Cordova? Here are some recommendations.

7 Tips To Choose The Right Mortgage Company

Pick a mortgage company that can connect you with specialized loans. Some mortgage companies only offer several basic types of home loans. But others offer a wide spectrum of loan products, some of which have specialized applications. Say, for example, that you are shopping for a fixer-upper. You are going to want a mortgage company that has experience with FHA 203(k) loans and similar products. Or let’s say you are self-employed. A company that is not used to working with self-employed borrowers may have a difficult time with your documentation. But one that offers self-employed borrower loans can move you smoothly through the process of applying for a loan without a W-2.
Choose mortgage experts who will answer your questions. Purchasing a home or refinancing can be complicated, especially if it is your first time around. You are going to want in-depth answers to your questions. The right Rancho Cordova mortgage company will not rush you through your consultation. They will take their time answering all of your questions with as much detail as you need.
Work with a mortgage company in California that will help you work through obstacles. It is possible to buy a home without perfect credit, or without 20% down—you just need loan experts on your side that will find you solutions. For example, Mortgage Consultants Group can help you apply for the CalHFA MyHome Assistance Program, which provides down payment assistance to those who qualify. We also can help you identify mortgage products with low down payments or no down payment and easy credit qualification requirements.
Go with a local business with local knowledge. A local mortgage company like Mortgage Consultants Group knows the real estate market in Rancho Cordova and throughout the Sacramento area. We have spent more than 14 years helping out homebuyers and homeowners in this region, and understand the obstacles and opportunities you may encounter when buying a home.
Choose a Rancho Cordova mortgage company that can connect you with affordable rates. Your mortgage company should be ready to go the extra mile to help you qualify for affordable rates. This may involve helping you apply for a particular mortgage type or giving you advice for raising your credit score.
Work with a business that communicates fast. How quickly the mortgage process moves forward often comes down to how rapidly a mortgage company communicates with borrowers. Mortgage Consultants Group will never leave you hanging during the mortgage process. We will quickly inform you if we need you to send over more documents or take other steps.
Choose a mortgage company with a reputation for customer service. You deserve a mortgage company that will go above and beyond to make every aspect of your experience a good one. Mortgage Consultants Group has more than 300 5-star reviews. Our patience, transparency, attention to detail, and personal warmth have all contributed to building this reputation for customer satisfaction.

Contact Mortgage Consultants Group Now

Are you ready to buy a home or refinance in Rancho Cordova or beyond? Please contact us today at (916) 669-1682 to schedule your consultation. We also work with customers in Gold River and throughout Sacramento, El Dorado, Placer, San Joaquin and Stanislaus Counties. We can also serve you elsewhere in California.

Your Complete Guide to the Vacation Home Loan