As excited as you were to buy your first house, we bet you’re equally as excited (if not more) to buy your second. Though the process of buying a home is quite similar, there are some different things to take into consideration as you take this step into real estate investment.
Here are some tips for second-time home buyers to navigate the process.
1) Determine the Use of a Second Property
There are many ways you can use your second property, whether as an investment, for vacation purposes, or maybe even for your college student.
Different lenders have different requirements, so decide how you’ll use the property before you even start searching. For example, investment properties are riskier and will have higher interest rates than properties used as second homes. Narrowing down the type of property can help you find a more focused budget.
2) Consider the Costs
Though a second property can provide significant gains in the long run, there will be extra costs you’ll need to calculate in your expenses–you don’t want to fall in love with a home to later find out you can’t afford it!
Alongside insurance, you’ll need to account for maintenance fees, furnishing, expenses, and any additional funds it will cost to travel if the property is further away. Figuring out finances now will help you relax later!
3) Figure Out Financing
Keep your eye on the second home, but don’t overlook your first. See if your first home can help you pay for your second!
Do you have some equity built up that you can use to access more money? Have mortgage rates dropped lower than you’re paying so you can cash-out refinance?
4) Prepare for Tougher Underwriting
If you can, settle any large debts and beef up your savings!
You’ll likely have to make a larger down payment for a second home, and the lender will require a higher credit score for approval. With that, it’ll be tougher to meet the debt-to-income ratio, so put yourself in the best financial position.
5) Find A Trusted Lender
Buying a second home is a big deal, which is why it’s crucial to work with someone with your best interest in mind. Having a mortgage company you can trust will make finding your home much easier.
If you’re ready to get started, connect with one of our USA Mortgage lenders on our website, so they can help you through the process.
