Real Estate

What You Should Know About Buying a Vacation Home

Vacation homes are selected according to their location and amenities. Buyers want a wonderful home that gives them many years of memories with their families. Reviewing properties for a vacation home helps the buyer find the most ideal property for them and their family. Finding the right financing makes it more affordable. 

Establish a Budget to Buy the Home

Establishing a budget to buy a home prevents the buyer from overextending themselves and staying in an affordable range. A lender provides a preapproval to show the borrower the maximum loan amount. It is recommended that the borrower stays in a range that doesn’t reach the highest loan amount. They can present these details to their real estate agent and review vacation homes within the range. 

How Often Will the Owner Stay in the Vacation Home?

How often the owner stays in their vacation home defines further requirements for the borrower. A vacation home limits the mortgages available to the buyer. If they are a service member, the buyer can get a VA loan to buy their vacation home. However, the borrower cannot have an existing VA mortgage financing a different home. Conventional mortgages are also a sufficient choice for financing a vacation home. Borrowers can get more options from Dustin Dimisa when buying a vacation home. 

Why FHA Isn’t the Best Choice?

FHA requires the borrower to use the mortgage to get a primary home only. The buyer cannot use the loan to get a vacation home or a second property that isn’t the primary home. FHA has several restrictions on their program. 

Will You Rent Out the Property?

If the property owner wants to rent out the vacation home, it could alter the terms of the mortgage contract. The lender might include the potential rental earnings into the borrower’s income, and this could increase the monthly payments for the loan. Renting out the vacation home with an existing mortgage might provide residual earnings, but it can also lead to further costs for the owner

Why You Need Unoccupied or Vacant Home Coverage

The buyer will need to purchase unoccupied or vacant home insurance to protect their property. It covers the property and items that are inside the property. Homeowner’s insurance isn’t enough to cover a vacation home if the property isn’t occupied, and the policy provides coverage only when the owner is staying in the vacation property. Unoccupied home coverage extends the coverage and protects the buyer’s investment more fully. 

It covers fires, natural disasters, and criminal vandalism. The homeowner can lower their insurance premiums by installing a security system in the vacation home, too. It helps the borrower keep their costs lower and protect their vacation home more proactively.

Vacation homes offer the buyer a great opportunity to make lasting memories with their family. Choosing a location that they love gives the buyer access to their favorite attractions and offers plenty of room to relax. Buyers choose an area that provides them with a wealth of benefits and a terrific setting for family vacations. Buyers can talk to a lender about financing a vacation home now.

Jude Thompson Oscar
Oscar Jude Thompson: Oscar, a home renovation contractor, shares DIY project guides, renovation tips, and ideas for transforming homes.