 |
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: |
 |
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 and different loan options in your area, consult BankRate.com.
Related Tips
|
|