Second Home Loans
A second home is a place you go for enjoyment that is not your primary residence. Like where you would want to go on vacation. This could be anywhere in Colorado! Generally, but not always, underwriters say a second home needs to be located at least 50 miles from your primary residence. We offer loan programs and different options for second homes to fit your needs.
Q. Is it difficult to get approved for a second home?
No, it is just like getting a mortgage for a primary residence. We do need to meet all the underwriting requirements, but there are no difficult hoops you have to jump through. Feel free to contact us, and we can walk you through the process and answer all of your questions. We can also start the pre-qualification process.
Q. What is the minimum down payment required?
We have options with as little as 10% down payment. This is also available on some larger loan amounts. These loan amounts can be around $625,000 or more, but it depends on the county loan limit. 20% and 25% down are typical and can result in lower payments, but 10% down can still be effective. The 10% down payment option does require mortgage insurance.
Q. The most common question
Can I rent out my condo? Financing a condo as a second home means you will use it some as a second home. But it is acceptable to rent out the condo when you are not using it. Certain restrictions apply, but as long as you control when you can use the condo it is fine to rent it out.
Q. What should I be aware of when looking at Condos?
Condos are a great option for a second home because the HOA dues would cover the exterior maintenance. Generally the HOA would be responsible for the exterior maintenance of the building and the landscaping. That saves you time when you want to enjoy your second home. Sometimes the HOA dues can cover things like cable TV and trash removal. Ask your realtor what is included. Each condo project is different.
All mortgage lenders have to approve Condominium projects. This is an extra step in the mortgage process. Documentation is usually required from the Home Owners Association. Because we specialize in resort lending, we can get Condos approved quickly. We are familiar with all the ins and outs of Condos and will not risk your loan approval or slow down the process.
Q. I’m not ready to buy yet but what can I do to prepare?
The most important thing is saving for down payment. Make plans, so you would be ready to put 10% or 20% down on the purchase price. If you have some ideas on this but aren’t sure where to start, contact us for a planning session.
Next, pay down debt. If you don’t have many months left of a car loan, try to get it paid off. Reduce credit cards that have large monthly payments. A general rule that could improve your credit scores is credit card balance should not exceed 30% of the credit limit. So don’t charge high amounts on your credit cards if you are going to be getting a loan. It can help to write a budget. We look at any monthly payments that show on your credit report. Actually writing out all of your monthly payments can be eye-opening. We do not count things like cell phone bills in the debt to income ratio.
Please contact Chad Noble for more information on getting pre-qualified, and we can also provide customized scenarios showing different payment options.
