What You Can Expect With A Vacation Home Mortgage

You can buy your dream vacation home using a vacation home mortgage. With rates at near historical lows and real estate prices falling  all over the nation. There’s never been a greater time to invest in a vacation home. 

There are  several different options with the vacation home mortgage. You can choose the traditional 30 year fixed. Hybrid ARM’s that offer fixed interest rates for several years and then turn adjustable. Or balloon mortgages that offer extremely low interest rates as well.

If you need to keep the payments as low as possible. You can often times have the option of doing interest only payments. Interest only payments can save you several hundred dollars per month. The only down fall is that you are not paying down the principal.

To get the lowest interest rates available plan on putting a down payment of 30% or more on the property you plan on buying. If you can’t afford a down payment that large don’t worry. You can get away with as little as 10% down.

Interest rates on a vacation home mortgage will normally only be .25% to 1% higher than the going interest rates on an owner occupied home. The more you put down and the higher your credit score the better the interest rate you will get.

If you currently own rental property lenders may view the purchase of your vacation home as another rental investment. The burden will be on you and your loan officer to prove to the lender that this is not going to be the purpose of the loan.

As always you should shop around for interest rates. No one lender has the lowest rates on home loans. If you already have a mortgage person you work with and trust. Stick with them. Unless they can’t get the type of vacation home mortgage you need.