Home loans for second or in other words, vacations homes and investment properties are still available in today’s mortgage market. Of course, the standards are a little different than for the purchase of a primary residence (a home you will live in), but there are still affordable options given the current level of interest rates and house prices.
For starters, you will need a down payment for the purchase of a second home or investment property and it will be need to be more than 0% or 3.5% as you can not use a FHA home loan or VA loan to purchase one of these properties. A good starting point is going to be 20% for a second home, though there are options for even a smaller down payment than that. However, anything with less than a 20% down payment will include mortgage insurance and additional rate hikes which could make a slightly larger down payment all the worth while.
On the other hand, when looking at an investment property, generally 20% down payment will be the minimum in a state such as Arizona as it will be very difficult to receive mortgage insurance on an investment property. And in fact, in this case a 25% down payment may make even more financial sense when it comes to the interest rate you are paying.
In addition, for second homes and investment property there are still many Fannie Mae and Freddie Mac backed programs available to purchase or refinance a home. That means a solid fixed rate loan or adjustable rate loan if you so desire. It also does mean higher standards for both credit score and overall debt profile.
However, in the end, when it comes to second homes and investment properties, there are many options available in the current market. It will require a down payment and a good credit standing, but with interest rates and prices so low, now may be the time purchase that vacation home or investment home for the long term.
For more information on current home loan programs and options for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com
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