How much can you afford?
Maybe that should have been higher on the list – but its fun to dream. Many lenders are happy to make loans on second homes. Generally you will need at least 20% down payment. 30 and 15 year fixed rate loans are available along with adjustable rate loans. The rates will probably be a little higher than a loan if you were buying your primary home. The lender will look at all of your debts including the second home payment and association dues if applicable and compare those to your income. A good rule of thumb is the ratio between income and debts shouldn’t be more than 36%.
The interest rate you will be changed will depend on your credit score, how much down payment and the property.
Using a local lender can really save you a lot of headaches. They know the local market and idiosyncrasy of resort properties. I work with a lot of good lenders and can refer you to them.
You may qualify but with the property? Find out more tomorrow in part 8.
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