Winter’s Here: How a Second Home Mortgage can get you a Ski House

Plan Your Second Home Mortgage Right and Enjoy Life More.

With home prices steadily recovering after the recent market downturn, many people are considering a second home mortgage to get that vacation home they’ve always dreamed of. The healthy market is helping many people rediscover their dream of owning that beachfront property, or say that amazing ski house.

If you and your family have taken any ski trips this year, you may be feeling a tug toward having your very own cozy cabin, nestled in beautiful white snow. While taking out a second home mortgage involves some special financial considerations, it is often a practical way to leverage assets and improve your lifestyle. Here is an overview of points you should keep in mind as you consider a second home mortgage:

Analyze the location

Yes, the snow is picturesque and there’s an incredible view but there’s more to location than appearance. Don’t be lured into a second home mortgage by the beauty of the property. First, check local property taxes. Resort and vacation areas often carry heavy tax burdens like view tax, and some regions charge property tax at higher rates on second home mortgages. Second, think about accessibility; how often will you and your family be able to use your vacation home? You may be better off renting someone else’s house if you only plan two or three visits each year.

Decide whether you plan to rent the house out

Lenders give different kinds of loans (with different terms) depending on whether the borrower plans to use a second-home only for vacations or if they plan to rent it out for part of the year. If you plan to use it only as a second home, your lender may require you to sign a “Second Home Rider.” By signing the rider you promise that you are not purchasing the home as an investment property. Collecting rental income can be an excellent way to afford that second home mortgage on the ski house you’re dreaming of, providing that you’re aware of the extra work (and extra income tax) involved.

Be a savvy shopper

It’s always a good idea to spend time visiting and talking to people in the area where you’d like to put your second home mortgage to use. Are property values going up? If so, you may be making a sound investment. Are any drastic new zoning changes being planned nearby? Local information sources are crucial for this kind of insider news. If you’ve got your eye on a specific place, check the sales price of comparable homes in the area to make sure that the asking price is reasonable. Finally, savvy shoppers monitor their credit rating and save up for a down payment between ten and 35 percent of the value of their second home. After all, lowering the cost of your second home mortgage will allow you to enjoy it all the more.

The National Association of Realtors notes that 13% of home purchases in 2013 were intended as personal vacation homes. Taking out a second home mortgage can provide you and your family with your very own bit of winter’s wild beauty. With careful planning and research, taking out a second home mortgage can be easily affordable.

If you have any questions about second home mortgages, or any mortgage-related concerns, please contact the experienced advisers at Blue Water Mortgage. We would love to help you make your dream of owning a ski house become a reality.

Roger Odoardi

Roger is an owner and licensed Loan Officer at Blue Water Mortgage. He graduated from the University of New Hampshire’s Whittemore School of Business and has been a leader in the mortgage industry for over 20 years. Roger has personally originated over 2500 residential loans and is considered to be in the top 1% of NH Loan Officers by leading national lender United Wholesale Mortgage.