Highlands NC Real Estate, Financing Vacation Homes
Financing vacation homes and Highlands NC real estate go hand in hand. Options for mortgages on a second home exist and the options depend on the intended use for the property. An investment property is different from a second home, for example. Ultimately, pre-approval for a loan is an important part of the buying process. As a result, ask your Highlands NC REALTOR for referrals of reputable lenders. It is important to find a lender who is well-versed in the vacation home market.
Investment or vacation home?
There is a difference between an investment property and a vacation home. An investment property is one that is intended to be income-producing, a home that will be rented out most of the time. A vacation home will be used regularly by the buyer, although it can be short-term rented on a minimal basis. When a Highlands NC home is rented out for more than 180 days it is considered an investment property. A mortgage will be different for an investment property then it will be for a vacation property.
What is the difference?
A mortgage for an investment property will require a larger down payment than for a vacation home. Likewise, the interest rate will likely be higher for an investment property. The difference in interest rates is typically between .5 and 1%. It may be tempting for a buyer to call an investment property a second home but it is important to realize that this would be considered fraud.
Find a lender
Speaking with an experienced lender will help ensure that you not only get prequalified but that you understand what a vacation home loan is all about. Be prepared and have your financial information in order. Additionally, you will need to prove that you can afford to carry a second home mortgage in addition to a primary mortgage.
Learn more about Highlands NC Real Estate
Contact our team at Berkshire Hathaway HomeServices Meadows Mountain Realty today to learn more about buying a vacation home in Highlands NC. We welcome the opportunity to update you on the market while answering all of your questions. We can also provide recommendations for reputable local lenders well versed in the second home market. Let our knowledge and experience serve as your guide to Highlands NC real estate.
Click here to read “How Can You Finance a Second Home?” from Realty Times.