Vacation Homes, Investment Properties – Home Loans for Second Homes Viable & Available

Vacation Homes/Investment Properties are called Second Homes. Homes loans for such second homes are viable & still available in current mortgage market. However, the standards are little different to those of primary residence (the home you live in). Looking at current level of interest rates & home prices, there are many affordable options available.

- Down payment is needed. It will need to be between 0-3.5% or more.

- Cannot use FHA Home Loan or VA Loan to purchase such homes.

- Good starting point would be 20% down payment for a second home. Larger down payment is worth it.

- Anything less that 20% down payment will include mortgage insurance & rate hikes.

- In Arizona, 20% down payment is minimum. (25% is more advisable and makes sense)

- Very difficult to get mortgage insurance on such property.

There are still many Fannie Mae and Freddie Mac backed programs available to purchase or refinance. That means a solid fixed rate loan or adjustable rate loan. It also means higher standards for both credit score and overall debt profile.

Overall, 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.