Buying a vacation home or second home is exciting, and the financing has a few important differences from your primary residence that are worth understanding up front.
What is different
- Larger down payments are typically required than for a primary home
- Rates can be slightly higher than primary residence rates
- Lenders confirm the home is for your personal use, not a rental
- You will need to qualify while carrying both housing payments
Second home versus investment property
A true second home that you use personally is financed differently from a rental property. If you plan to rent it out regularly, it may be treated as an investment property, which changes the terms.
Plan for the full cost
Beyond the mortgage, budget for taxes, insurance, maintenance, and any HOA or travel costs that come with a second property.
Tell us how you plan to use the home. The intended use determines the program, the down payment, and the rate.