You’ve learned about the costs of buying a vacation home, now you need to decide how you’re going to pay for it and which route is best for you.
How is purchasing a second home different from purchasing a first home?
There are significant differences between purchasing a first and second home including:
- Larger down payment. A bigger down payment (sometimes 10%) is often required for purchasing a second home.
- Interest rate. Interest rates on second-home loans tend to be higher than those on primary residences.
- Qualifications. Lenders may have stricter eligibility requirements for income, credit scores, debt-to-income ratios and more for second home purchases.
What are my financing options for a second home?
Just like your first home purchase, you can finance your second home with a mortgage. You’ll choose a mortgage type, such as an adjustable-rate or fixed-rate mortgage, as well as the loan term, such as a 15- or 30-year loan. When you finance a mortgage with MSGCU you take advantage of marketing leading rates, our free homebuyers workshop, true preapproval, interest rate lock, and more. Plus, MSGCU has mortgage options in Michigan and Florida, so whether your second home is up north or way down south, you can count on us.
Connect with a friendly MSGCU mortgage consultant to get started and learn how you can save more than $600 on closing costs with our $99† mortgage processing offer when you apply by September 30.
You can also finance your second home using the equity of your first home by taking out a Home Equity Loan. A home equity loan is perfect for a home renovation, if you need to lower a payment with debt consolidation, and yes even a second home. We offer market-leading rates as low as 6.25% APR*, a hassle-free application, and we’re here to answer your questions and guide you through the process. Learn more.
Which additional factors do I need to consider when purchasing a vacation home?
Remember to consider these factors when purchasing a vacation home or second home:
1. Buying vs. building. Buying a ready-made home will allow you to move in or rent out the home sooner. Building may take longer, and will allow you to customize the home to your heart’s (or budget’s) content.
2. Land. If you decide to build, be sure to consider the cost of land when calculating the cost of your new home. You’ll also need to take local zoning laws into account as well as utility access for the property.
3. Storage for recreational equipment. Before signing on a property, make sure it has sufficient storage for recreational vehicles and equipment you may want to use at the home, like boats, jet skis, snowmobiles, kayaks and skis. Make sure to check with a neighborhood association or the local municipality to see if there are restrictions around the storage of these items on the property, too.
4. Amenity access. Check to see if the amenities you desire in a vacation home, like pools, beaches and nearby recreational activities, are accessible before you close.
With your new wealth of knowledge, you’re one step closer to owning your dream vacation home. Find a MSGCU mortgage consultant, call us at (866) 674-2848 or (586) 263-8800 and select option 2, or visit any branch office to get started!
†$99 mortgage processing fee offer available for mortgages loans originated and disclosed between 5/1/2024 and 9/30/2024 and saves $646 on mortgage processing when you obtain a mortgage from MSGCU. Homebuyers are responsible for any third-party closing costs including but not limited to home appraisal, home inspection, title, tax, and insurance. A loan amount of $200,000 at an interest rate of 7.000% and an Annual Percentage Rate (APR) of 7.039% has a payment of $1,330.60 with 0 points due at closing. The payment does not include property taxes or insurances, the actual payment will be higher. *Special Promotional Rate. Eligible on fixed rate home equity term loans applied for during the promotional period from 6/3/2024 through 8/31/2024. Subject to credit approval. Annual Percentage Rate (APR) may be higher, based on term of loan, credit score, collateral, and loan to value. Ask an MSGCU Representative for details.
Category: Finance
« Return to "Blogs"
You May Also Like
8 true costs of buying a vacation home
Considering a second home or vacation home? Here are eight key costs to consider.
Busting the 20% down myth
It’s common to think you need to save 20 percent of a home’s value for a down payment before home ownership can be considered. Good news: it’s a myth. Read on for more good news.
Hit the water, not your wallet: 8 simple steps to save for a boat
Ready to make waves without sinking your budget? Here are eight simple steps to save up for the boat of your dreams.
Road Trip for Less
Need a vacation, but don’t want to break the bank? A road trip might be the right blend of adventure and low cost you’re looking for.
5 reasons why you shouldn’t put off getting a loan
Even though rates have gone up, getting a loan can still be the right move for you depending on your situation. Here are five reasons why.
Put your home’s equity to work for you this summer.
The hot real estate market has led to a boom in popularity for home equity loans with many Michiganders choosing to stay in their home purchased or refinanced when mortgage rates were historically low. Read on to learn what a home equity loan is, what you can use it for, and see if it’s right for you.
Saving at the vet: how to keep your furry friends from breaking the bank
If you’re an animal lover, you know that vet bills can be overwhelming. Learn some great ways to lower your costs while still giving your furry friend the best possible care!
First timers’ guide: The three stages of the homebuying process
The process of buying a first home can seem overwhelming. With a step-by-step approach, the experience becomes less daunting – and a lot more fun.
The Heart of Your Finances: Your Checking Account
Maybe you’re considering opening a checking account or aren’t even sure if you really need one. The experts at MSGCU say you do and here’s why.
Don’t go mad this March over gambling. Understand the risks of online sportsbooks.
Sportsbook apps seem like a fun and easy way to win money. Like any form of gambling, they run the risk of monetary losses that can seriously impact your finances.
Four Steps to Go From Renting to Buying
Tired of renting your home, but not sure you’re ready to buy? Here’s how to make the best decision and go from renter to buyer when you’re confident it’s time to purchase a home.
The Post-Holiday Budget Recovery Guide
The holidays are in the rearview, and if you’ve gone over budget with your spending, it’s time to deal with the aftermath. Here’s how you can get your budget back on track for the new year and avoid future budget-busting.
New Year Financial Resolutions
The New Year brings new financial goals, yet many of us feel overwhelmed when we start thinking about what we might tackle as a resolution. Here are 6 tips to get you started from the experts at MSGCU.
5 Ways to Increase Your Credit Score
Your credit score is vital to your financial health. An excellent credit score can open the door to large loans and better interest rates, as well as employment opportunities and more.
Discover the best ways to build and maintain an excellent credit score.
Payday Loans: A Serious Problem with A Smart Solution
Payday loans can seem like an easy way out of a financial jam, until you get caught in the spiral of fees. Fortunately, MSGCU has you covered when unexpected needs arise and you’re out of funds until the next pay day.
Are you ready for a disaster?
September marks National Preparedness Month. Whether you prepare now or at another time, MSGCU can help with these tips.
Mortgage options to help you unlock the door of your dream home.
Not all mortgages are the same. Rates, product offerings, and other benefits add up to your perfect mortgage package.
9 tips to follow on National Financial Awareness Day
MSGCU helps you get the most out of your money every day.
Is it time to choose a new bank?
Read on for 4 signs it’s time to leave a bank, and 4 questions to ask a new one.
Why CDs are a Great Investment for Younger Savers
For millennial and Gen-Z savers, Certificates of Deposit offer the best of both worlds: high returns & no risk.
A Blueprint for Managing Credit Card Debt
Paying down high-interest rate credit card debt can feel overwhelming sometimes. Check out these tips to help you effectively knock out your debt.
How To Make Certificates of Deposit Work for You and Your Savings Goals
Is building your savings account a priority in your financial goals? Learn more about your options and determine the right choice for you when it comes to savings accounts and certificates of deposit.
Beyond the piggy bank: 5 ideas for helping kids achieve more financial independence.
Teaching kids about money management can seem daunting, but it doesn’t have to be complicated. Read on for five simple money truths to help prepare your kids for a successful financial future.
What to do before getting your first loan.
You’re considering a big purchase, and you’re going to need a loan to make it happen. Before you take the plunge, take these steps to make sure you’re ready for your first loan.
Turn renting into owning with our step-by-step guide
Tired of renting, and feel the homebuying process can be overwhelming? See why now is the perfect time to become a homeowner with our easy step-by-step homebuying guide.
Help your college kid make smarter, safer money choices, right from the start.
When your child is ready to head off to college, here are 7 tips from MSGCU you can use to help them build financial freedom and make smarter, safer money choices.
Going to college? Take MSGCU with you.
Learn all the convenient ways you can bank with us, no matter which campus you’re headed for.
Six smart financial moves to make when you get your first “real” job.
Your hard work has paid off and you’ve landed your first “real” job. Congratulations! As you embark on your brilliant career, you can make your future even brighter by making these smart financial moves.
5 steps to RV- and boat-buying for an unforgettable spring and summer.
Ready to spring into Michigan’s warm weather activities with a new or used boat, RV or ATV? Check out MSGCU’s 5 steps to RV, boat and powersports buying.
Applying for a new mortgage? We have tips to save you time.
Whether you are a first-time home buyer or reentering the home buying or refinancing market, the application process might seem daunting. Before you start emptying your filing cabinet for documents, see how you can streamline the application process.
8 ways to get your teen ready for financial independence.
Let go, hang on, let go, hang on, let go … help with getting your teenager ready for more financial independence is here! Read on for wisdom from the financial champions at MSGCU.
5 ways to save money on a new or used car
With a few smart financial moves, you can save a lot of money on your current vehicle or a new car purchase.
Spotted: hidden fees in rates. Here’s what to look for to get the best deal.
A good rate can turn bad quickly when fees and points are included. Read on for a simple tip to spot the best deal when shopping for a mortgage.
Your credit score: What it is and how you can make it better.
What is a credit score, and how can you make sure yours will help, not hurt you? Read on to get answers to these questions and more. We’ll help you get off on the right foot with your credit history.
Spring clean your finances
Whether you are looking for ways to save or spend wisely this spring, the team at MSGCU has options and advice for you.
Two truths and a lie about homebuying success
As the winter turns to spring, many turn to shopping for a new home. An MSGCU mortgage expert describes two truths and a lie about being ready for the spring shopping season.
How to open a bank account at MSGCU
Ready to manage your own money? Read this blog to learn how to open an MSGCU bank account and make the most of your membership.
Your 2022 home goals: Tips for financing home improvements or a new home
A common 2022 goal is home improvement, either with renovations or a move. Here are some tips on financing your goals for the new year.
Start ahead, stay ahead: 7 must-haves for a better first bank account
Think you’re ready for your first bank account? Read on for 7 must-haves when looking for your financial partner.
Is it time to leave your bank?
Learn to recognize the signs that it is time to move on from your current bank and choose the next one. Plus, three key questions to ask when choosing a new bank.
8 questions to ask before taking out an auto loan
Whether you’re buying or refinancing, choosing an auto lender is a big decision. Take your time to find one who will work with you and your financial goals; in other words, do your homework. Read on for 8 key questions to ask lenders before you get (or refinance) an auto loan.
Check interest rates today, save tomorrow.
Could your interest rates be lower or are you paying too much in interest rates? Read on to find out more and what to look for.
10 tips to follow on National Financial Awareness Day.
Financial Awareness Day was August 14. Let MSGCU help you get the most from your money with these tips every day.
8 myths of modern mortgages every homebuyer should know.
Whether you’ve done this before or you’re a first-time homebuyer, getting current about best practices for finding and financing a new home is always a good idea.
5 financial habits to start today
Try these five tips, or start with just one, to bring your financial wellbeing to the next level.
How to win at debt
An important consideration when taking out a loan is whether it might be good debt or bad debt. Not all credit is bad, read on to learn the difference.
Starting your emergency savings fund
It’s never too late to start your emergency fund. Read on for easy tips you can do today to start saving.
Debit or credit: What’s the difference?
Swiping and signing to make a purchase is so easy these days, but do you grab your debit card or credit card? Does it matter? Read on for answers.
Smash your credit card debt
While not all debt is bad, too much can limit the amount of money you can put toward your life goals. Read on for three easy steps so you can use credit to your benefit versus being overwhelmed with payments you can’t afford.
Small savings = big rewards!
Saving money doesn’t have to be daunting. Read on for quick and fun ways to save from MSGCU’s experts.
Study, work, save: How to win at college.
Save money in college without having to give up everything you love with these tips from Michigan Schools and Government Credit Union.
MSGCU is on the front line of your finances
MSGCU has always been here for its members, even during COVID-19. Learn how we helped members financially impacted by COVID-19.
See you at the drive-thru!
Did you know you can complete the same actions through an MSGCU drive-thru that you can in a branch? The drive-thru is a safe and easy way to complete transactions, and a friendly MSGCU team member is always there to help.