Financing a 2nd Home

Financing a 2nd Home

Should I Finance a 2nd Home with a Second Mortgage or Refinance?

In a recent report, the National Association of Realtors highlighted that 40% of homes and condos purchased nationwide last year were acquired by individuals investing in second homes. NAR President Thomas M. Stevens remarked, “What we see now is a crossover between largely vacation and investment-home owners, with people recognizing the value of those investments and pouring more assets into real estate.”

Given the growing trend of consumers investing in property, you might be contemplating the idea of acquiring a second home or vacation property. The question arises: How do you secure financing for such a venture?

How to Get Approved for 2nd Home Loan with a Refinance or Second Mortgage

As property values ascend, many individuals discover that they have accrued equity in their current homes. Notably, 28% of investors with a mortgage for an investment property utilized their primary residences to obtain funds for the down payment, and you could explore a similar avenue. Opting for an equity home loan or 2nd mortgage to fund home improvements and further enhance equity is a commendable strategy.

Taking it a step further, you can leverage this approach to secure a down payment for a second home. Borrowers should contemplate adding a second mortgage if they require cash to initiate construction on their vacation home or to invest in additional properties. This article was written by Rebecca O’Connor.