InsuranceĪs climate change continues to spark weather-related disasters like wildfires and hurricanes, getting homeowners insurance is becoming more expensive. Further, because second homes are considered more risky than primary residences, the interest rate will typically be noticeably higher.
Lenders do differ in this regard, but you'll need to do some homework. Depending on how you plan to use the property, lenders may increase the down payment requirements, interest rate, or simply not offer a loan program that meets your needs.įor example, if you plan to rent the second home for more than two weeks per year, the lender may consider it an investment property, requiring a minimum 20% down payment and only permitting conforming (non-jumbo) mortgage loans.
Some would-be second home buyers might also be surprised at the cost of getting a mortgage on a vacation house.
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