Generally, a second home is a place of residence that an owner uses secondary to his or her private residence. Some people buy second homes for either investment purposes or to use as a vacation house. Buying a second home can also be a matter of convenience, especially for people who work in the city but maintain a primary residence in a distance suburb. If you're considering taking out a mortgage to buy a second home, it's important that you're aware of some specific guidelines surrounding your purchase. For example, to qualify as a second home to mortgage lenders, you must stay in the home 14 days or more each year. The home also may not be leased or rented other than on an occasional basis. Keep in mind that lenders generally enforce tougher qualifications on second-home applications than on primary home loans to ensure you're financially capable to pay both your primary and secondary home loans. Traditionally, the interest-rate on second-home mortgages and closing fees run slightly higher than for first homes. As a result, it's generally best to buy a second home when the economy is favored by low inflation and low interest rates. For more information on buying a second home, consult a mortgage broker or a real estate professional.
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