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Mortgages for Vacation Rental Homes
Questions to ask yourself when getting a mortgage to finance a vacation rental property.
Q: What type of mortgages should you consider when buying a vacation rental home?
| A: When you are pondering or researching the idea of buying a vacation home, whether for pleasure or profit, financing your home will likely come to the forefront of your process. While there isn't a simple answer to the question of “which loan program,” the right type of mortgage for you depends on many different factors: |
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What does your current financial picture look like?
- Can you afford the home without any consideration of rental revenue?
- Do you expect your finances to change within the next 3-10 years? Are you going to retire soon? Children going to college? New job, etc.
- How long you intend to keep your second home?
- How comfortable you are with the prospective mortgage payment and the possibility of it changing (Important to consider if you if are thinking abut an adjustable rate mortgage)?
- Do you intend on renting your home? If so, how many weeks you intend to rent your property?
- What is a reasonable rental income potential, or the property's past rental history?
- Do you intend on “renting by owner” or using a management company to rent (which means you will have to pay commissions)?
- Do you expect to pay the property off through principal payments or are you banking on property appreciation to make you money?
For current mortgage rate information, a mortgage calculator, and different loan options in your area, consult BankRate.com.
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What advice do you have for other homeowners about financing a vacation rental home?

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© Christine Karpinski, 2007, U.090507.AF
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