For Immediate Release – Virginia Beach, VA
February 28, 2013
Real estate markets across the country are seeing a similar trend: buyers are taking advantage of low mortgage rates by purchasing vacation properties. Specifically, they are buying homes in exotic locations, like at the beach or lake, or in the mountains for prime skiing.
“While some of these buyers plan to use the second home as a vacation spot, many are thinking about the possible investment potential,” says Pat Barton, Real Estate Professional of RE/MAX Allegiance. “Either way, some are running into trouble when it comes to mortgages. It may be hard to believe, but lenders are stricter with vacation home mortgages than for traditional homes.”
Even with immaculate credit, getting a vacation home mortgage can be tough. If you are thinking about purchasing a house at the beach then consider how much it will really cost before you get your heart set on a specific property.
Photo Courtesy of Bill Gassett
“Vacation homes are often more expensive than a traditional home based on location alone, and as a result, lending is tighter,” says Barton. “This doesn’t mean you should be discouraged, but it does mean you need to be hyper-aware.”
Your credit must be great – 720 or above for most lenders. The lender will also scrutinize your existing debt, property taxes, and the mortgage on your existing home.
Another thing Barton suggests you take into account when looking for a vacation home? Location. “Lenders heavily scrutinize the location of your future property,” says Barton.
“While all markets took a property value hit, vacation destinations took the brunt of the real estate crash. Sandbridge Beach did relatively well and the market here seems to have stabilized. If the lender thinks the home is in a location where prices may continue to drop, they may reject your loan application,” says Barton. “Lenders may also be weary of giving out an out-of-state loan, or working with a location they are unfamiliar with. We have much greater success working with local lenders that know the Sandbridge market.”
A vacation home can be very rewarding, both in its ability to provide a relaxing escape for your family, and in its potential as an investment property. Just be sure to do your research before you jump on board the vacation home bandwagon.
For more information on finding the right lender, please contact Pat Barton with RE/MAX Allegiance at [email protected] or 757-478-8264.