A vacation home of your own can be a great way to unplug and unwind. It can also be a smart investment if it fits into your planning and is financed properly.
Ark Mortgage can turn your dreams of a second home into reality by providing you with the perfect loan. We understand the specifics of second home funding and how it differs from that of primary residence or investment property funding. And since we are mortgage lenders, we will walk you through the entire process.
Because you are looking to take on a vacation property in addition to your current home, the interest rate will likely be higher than for your primary residence. Fill this calculator with the best estimates of your income and expenses and we will determine your maximum monthly housing payment and the resulting mortgage amount.
A second home is a house, condominium, or townhouse that you intend to live in yourself for part of the year, in addition to your primary residence. Usually, second homes are used as a vacation home, but can also be an apartment close to your workplace.
The difference between a second home and an investment property will affect the type of mortgage you qualify for.
A “second home” is a house, condominium, or townhouse that you intend to live in for part of the year, in addition to your primary residence. Usually, second homes are used as a vacation home. With a “second home loan,” you need to qualify for both your first home and your second home without consideration for potential rental income. Interest rates on second home loans are typically the same as traditional mortgages.
An “investment property” classification is used when you are buying the property strictly to rent out for additional income. To determine if you qualify, your lender may need to know the rental history of the property. Typically, mortgages for investment properties carry a higher interest rate than is charged for second home loans due to the risk of inconsistent rental income which is typically needed to pay off the loan.
The mortgage interest tax on your second home might be deductible but there may be caps and limitations. Be sure to check with your tax professional for more information.
