Summer is going to officially be here before we know it. Heck, with the amazing weather we’ve been having, you might have even convinced yourself it’s already here.
As you dive headfirst into summer vacations and weekend getaways, you could find yourself toying with the idea of a more permanent destination. A vacation home. A place out of town that’s all yours.
However, the real questions are: Should you buy a vacation home? Is now the right time?
To help you decide, we’ve outlined three key questions to consider:
Can your budget handle it?
While not all vacation homes are as expensive as a primary residence, purchasing one will always mean introducing an additional drain on your monthly budget. It’s not simply a question of whether of not you can make the mortgage payments. You’ll also need to budget for routine maintenance, utility bills, taxes, and the unexpected major repairs.
How will you finance the purchase?
While you may have used a VA or FHA loan to purchase your primary residence, these loan assistance programs are not an option when it comes to buying a vacation home. If you have the financial means for an all-cash purchase, the entire process will be much simpler.
However, if like most of us, you don’t have a few hundred thousand dollars just waiting to be used, you’ll need to look into other avenues. You might consider:
A Home Equity Loan – A home equity loan allows you to leverage the equity in your primary residence to secure a second mortgage for your vacation home.
A Conventional Loan – You’re probably already familiar with conventional loans. They can be a great option for purchasing a vacation home. However you’ll need to be prepared to make a substantial down payment – in most cases 20 percent of the purchase price.
Will you really use it?
Assuming you can afford to buy a vacation home, you’ll ultimately need to decide if you will really use it. If you are the kind of vacationer who constantly wants to go some place new, becoming financially invested in one destination might not be for you. However, if you love going to some particular place and rent a house there every chance you get, then a vacation home could be right up your alley.
Ready to explore your options? Give me a call today.