If you are thinking of purchasing a vacation home but aren’t sure of how to start the process or believe it is unattainable here is a plan to help you think through the purchase of a vacation home and making it a reality.
Consider Lifestyle When Choosing Housing Options
Most people believe they need to own a primary home before purchasing a vacation property. While this is what most people do there is no rule stating you have to purchase real estate in this way. If you like to live right where you work maybe renting an apartment or smaller home in the city would help you to buy a vacation property outside the city limits to enjoy on weekends and time off. Maybe you own a large home in the burbs or country and would like to purchase a second home to enjoy a much different location and some down time. Maybe you wan to try your hand at investing but still get use from the home.
What would you like the home to look like? Where would you like it to be? What is your lifestyle? Are you single and need little space/want less upkeep? Do you want a large sprawling space and can afford someone to look after the home while away? Do you have children and prefer a relaxing atmosphere outside of the bustling tourist spots but close to activity? Do you want to be in a walkable area requiring no car? Do you want to live near this place so you can go there often or do you want a getaway in a far off destination you visit one or two times a year?
How You Use the Home Determines the Financing
There are three financing options when purchasing a vacation property.
Primary Residence- this would be used if you are renting and your vacation home is your only owned property. You can purchase the home for as little as 3% down depending on credit history and finances and also receive many tax breaks of home ownership.
Secondary Residence- You can finance a vacation home you do not intend to rent through a lender for about 20 percent down payment with the same mortgage rates and tax benefits of regular home ownership.
Investment Property-If you are thinking of renting the property while you are not in it you would need to finance it as an investment property. Interest rates are slightly higher for investment properties and you will need about a 30 % down payment. Tax breaks are a little smaller but you will be making income to help pay for the home.
Related: Costs of Homeownership
Contacting a lender about the possibility of buying a vacation home will allow you to go over all of your finances and see how much home you can afford.
A lender will qualify or pre-qualify you for a certain amount and give you an estimate of what the down payment needs to be and what the monthly payment will look like but they do not add in all the other costs that come with ownership such as utilities and maintenance. Be sure to add these to your monthly bill don’t forget about the cost of having someone look after the home,furnishings for the home, and travel expenses to get to the home.
Local Realtor and Lender
When you have decided on a place to buy a home it is best to use an agent that knows the local market and the specific tax rates of the area. Unless you have a close relationship with your current lender it is also best to use a lender in the area which you are buying the home to avoid any confusion.
Read more: Questions to Ask a Potential Buyer’s Agent
SunsetBeach NC is a great place to purchase a vacation home. There are many great properties of all types near to one of the best beaches in the world. For more information on Sunset Beach NC real estate feel free to browse the website or contact us anytime.