Knowing the Steps, Qualifications and Eligibility Criteria for Purchasing Vacation Homes

As an existing home owner looking forward to purchasing a secondary residence or vacation home in the far-flung suburbs, it is always advised to be knowledgeable about the loan approval eligibility requirements. Here in the US, especially in states like Arizona, Colorado and Wyoming, there are credible institutions like “Affordable Interest Mortgage” that can help average borrowers connect with A+ certified lenders that provide affordable finance on easy repayment terms, and with the promise of lower down payments.

It makes sense to contact one such mortgage brokerage firm that has professionals in the form of loan managers to guide you secure an affordable vacation home mortgage through an accredited bank or financial institution. As the credit score requirement is high, you need to look for lenders that provide loans to individuals even with a low credit score. In fact, to qualify for a second home mortgage, you must adhere to certain guidelines.

·         You need to have a cash reserve of at least 2 months and sufficient assets. 

·         A minimum down payment of 10%. 

·         A high credit score rating. 

·         Be prepared for higher monthly mortgage rates. 

·         You can potentially use your rental income to pay mortgage payments.

 

Other Key Requirements for Buying a Second Residence or Vacation Home

 

If you’re serious about owning a vacation home in the US, it is better to know more about the guidelines and eligibility criteria beforehand. The standard vacation home mortgage requirements in the US are listed below.

• As a borrower, you must fulfill the minimum credit score and down payment requirement, without exceeding the 45% cut-off limit of debt-to-income ratio.
• The property must be a single family residence, which is suitable for use throughout the year.
• It must be owned and occupied by solely the borrower/owner, and cannot be rented full-time.
• You must have an excellent credit rating and have the ability to make a 10% down payment.
• You should have adequate cash reserves for property maintenance, and a credit score of 680 and above.

 

So, when you’re partnering with a registered mortgage broker, their professionals can guide you through the right steps, and make the loan approval process seamless, by carrying out the major paperwork and documentation. But before applying for one such loan, you need to decide on how you would use the vacation home, whether you can afford it and research about vacation home insurance. Thereafter, select a local lender and decide how to finance your vacation home. This works out well for all aspiring borrowers.