Profile picture for user4235710

Vacation/second home question

If I purchase a vacation-second home and use it for part of the year, but less than 180 days and rent it out some of the year, again less than 180 days, would that be permissible?  And I understand it would be vacant for some time during the year as well. Would it still qualify as a second/vacation home.  If its in a resort area, the mountains which is resort for someone who lives in FL over 50 miles from my primary residence. As I understand it, the DP would be 10%, but what rate should I expect to pay?

  • August 15 2013 - US
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Answers (5)

Profile picture for Brookstone Mortgage
What you are describing is not a second home and you won't get financing on it as such. Falsifying the application would be fraud so you don't want to go down that alley. Buy it as an investment property. Multiple owners is not going to help anything; time shares are still not second homes.
  • August 17 2013
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Profile picture for user4235710
yeah, I don't think I could in good conscience say I wouldn't also occasionally rent it as a vacation rental and use it several times a year as a vacation home.   I wonder how the lender would view multiple owners, like two or three families buying it together as a vaca home.  I'm in real estate, but all my experience is in primary and investment properties in FL, I have no experience in NC or in second homes.
  • August 16 2013
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If it is your intention to rent the home then it should be listed as a rental property on your application.  Please note if it is a condo in Florida you may have some challenges financing this with lenders that sell their mortgages to Fannie Mae.  Also rental properties in general require larger down payments and have higher interest rates.  Feel free to contact me via my profile if you would like to discuss more.
  • August 16 2013
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My mother just bought a vacation home here in TN by us and she had the option of putting 10% down. She ended up putting 20% down but it was just to get a better rate. She had to sign a letter stating that the home will NEVER be used as a Rental to avoid the home being counted as an investment property that requires 25% down and had a much higher rate. Her rate on a 2nd home/vacation property was 4.5% when she closed on it around 2 months ago. Good luck
  • August 16 2013
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Profile picture for Outer Banks N C
90% of what I sell are 2nd and vacation homes here on the oceanfront of NC. 10-15% down payment is not unusual, shop around and talk to lenders in the area of the vacation homes because they are more familiar with them than some lenders that don't do those type of loans often.

Talk with your accountant. The IRS asks if you use a house more than 14 days, you would have to say yes you do unless you are there doing work to it. Also ask about the tax deductions you can make.


tim
  • August 16 2013
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