What Is a Second Home?

As the weather begins to turn, many people are beginning to think about their vacation plans. Some will fly away to their favorite vacation spot, but taking a vacation to a place you have to fly to can get expensive and can limit where you go and what you can do.

A good alternative can be to have a vacation home that's there for you whenever you want to go.

What Is a Second Home?

A second home is defined as a one-unit property that's located within a reasonable distance from your primary residence. It can be a home that you occupy for some portion of the year or by someone you allow to occupy it. However, to be a second home, it must not be rented or be part of a timeshare arrangement.

So, it might be the cottage you own on the lake a few hours away; it could be a home you let your son live in while he goes to college; or it could be a house you own that your friend and her children moved into because she lost her job. Those are just a few examples.

A growing number of families are buying vacation homes and it's a trend that's likely to continue. If your new vacation home is close enough to your permanent residence, every weekend could be an opportunity to go fishing on the river or skiing down the slopes of your favorite mountain.

Finding a Second Home

Finding a second home doesn't have to be hard. You just need to work with a reputable realtor -- one that you can trust and who may come at the recommendation of your friends or family members. Since the Internet is becoming a highly valuable tool, you can also go online to search for a good realtor. One good site to try is Realtor.com.

Financing a Second Home

The decision to buy a second home does depend on things like: how affordable the home is, the time it takes to travel to get there, and how likely it is to appreciate. But affordability doesn't have to be the most difficult factor. Quicken Loans offers several types of mortgages that make buying a second home very affordable. You could get the Secure Advantage Loan that gives you a low fixed rate for five years with the choice of four different payment options including the minimum payment. The minimum payment is calculated by the interest rate minus three percent, making the minimum payment extremely low. This can be an incredibly great way to finance a second home.

You could go with the SmartChoice Interest-Only Mortgage where for the first 10 years of the loan, you are only required to pay the interest; though, you could add as much principal to your payment as you wanted.

You could also go with a home equity loan. There are some lenders, such as Quicken Loans, who offer home equity loans for up to $500,000. Or you could go with a jumbo loan if the purchase price of the home is more than $417,000. To get an idea of how much you can afford, try using the Quicken Loans Home Affordability calculator.

So if you have plans to buy a second home, it doesn't have to be difficult at all. Once you find a realtor that you can work with, you have several options to finance it. All it takes is some good research to find out which works best for you. Talk to a Quicken Loans home loan expert by calling (800) 963-2177 to find out which financing option is right for you.

Courtesy of ARA Content