Heading Towards Retirement? Buy a Second Home!

The majority of people heading towards retirement prefer to buy a second home in calm and serene places such as Bethany beach, Ocean city, and Panama City beach. Financial experts suggest buying a second home 5 to 10 years before you retire. So, you might want to look at your options for investing if you plan on retiring in the next decade or so.

What do you gain?

One of the benefits of buying a second home well before your retirement is its ability to generate rental income. If you plan to move into your vacation home once you retire, passive income generated from renting it will certainly be useful. Another benefit is that you get to live in a calm place which will keep you healthy.

If you are planning to buy a second home in Bethany beach, mortgage lenders like Steve Morgan can help you to qualify for a second home loan even under stringent regulations. They usually suggest you to make a down payment greater than 20 percent of the price. This significantly slumps down the monthly payment for vacation home and easily allows you to qualify for the mortgage.

If you feel that investing in a vacation home is what you need and afford right now, then by all means do. Having a home where you can spend your post-retirement days in peace is a dream for many and truth for a select few.

Why you should Buy a Second Home

Lower interest rates on mortgages, in recent years, have encouraged more and more people to invest in real estate. Most of them are opting for buying vacation homes. In fact, a recent survey from National Association of Realtors suggested that vacation home sales surged as much as 30 percent in 2013 compared to 2012. Popular places for buyers include Bethany beach, Ocean city, and Panama City beach.

Investing in second homes

Some people buy vacation homes as a place for relaxing with their families. Some buy it for generating passive income. Others purchase it to spend their post-retirement days in a calm and serene place. It’s all about personal preference.

Getting mortgage for a second home has been difficult for an average borrower after the new mortgage lending regulations. Now, mortgage lenders screen consumers’ complete financial picture before lending them home loans. The regulations also suggest that a borrower’s entire debt payment should not exceed 43 percent of their gross income prior to tax withdrawal.

If you are planning to buy a second home in Bethany beach, mortgage lenders like Steve Morgan can help you to qualify for a second home loan even under such stringent regulations. They usually suggest you to make a down payment greater than 20 percent of the price. This significantly slumps down the monthly payment for vacation home and easily allows you to qualify for the mortgage.

If you feel that investing in a vacation home is what you need and you can afford it right now, then by all means do. Having a home where you can spend your post-retirement days in peace is a dream for many and reality for a select few. Having a second home in a popular vacation spot can have its own perks in terms of a healthy passive income. 

Vacation Homes Preferred by Locals and Tourists

A growing number of people now prefer to invest in vacation homes to live in style. More importantly, vacation homes in calm and serene places like Bethany Beach are being preferred by people to avoid the pollution in the busy cities.

Reason behind the interest 

There are a number of reasons for the increasing popularity of vacation homes. The first is that vacation homes have become good investment opportunities as the tastes of people are becoming very expensive. The second reason is that vacation homes can be rented out to others during the times when the owner is not using them. Rents of vacation homes in places like Bethany Beach can range from US$ 250 to US$ 1,000 per night depending upon the range of facilities available. Just like the normal houses, vacation homes too are bought on a mortgage due to their higher prices. Going through the paperwork involved in the mortgage process can be time consuming and difficult for busy professionals to manage on their own. Hiring a good mortgage lender like Steve Morgan can ease the mortgage process as they can guide through the whole process.

Buying the vacation home in locations like Bethany Beach has emerged as a good investment option for many rich and middle-class people. However, managing the mortgage process for buying a vacation home can be an excruciating process without help from a professional mortgage lender. So, pick a decent mortgage lender before you start looking for your dream vacation home.

What you should Know Before Getting a Vacation Home

A quick rejuvenating get away thrusts the life back into us. Vacations are as important as work days. In 2013, there was a 30 percent increase in the number of Americans who invested in buying a holiday home. There are many great escapes like the calm, serene and picturesque Bethany Beach area.

Before taking the big step 

Location of your vacation home is as important as the location of your regular home. Explore and find the ideal place where you will love to go and de-stress. Check out the locations personally. It is always better to first talk to someone who is a resident there than relying on the internet.

The next step after identifying the location is to raise the required capital. The market offers several mortgage options and mortgage lenders. Steve Morgan is a mortgage consultant who works with Bethany Beach lenders, a well known mortgage firm.

A vacation home shouldn’t be too far from your regular home making frequent commuting hard. Renting out vacation homes is a good idea too. They aren’t lived in for most of the year and it could add to your income.  Do look into the different tax laws because rental agreements are governed by different laws when compared to owner occupancy.

When it comes to a vacation home always think of the future. Do not over rent or under rent. Think of the market fluctuations. Consider the assistance of a mortgage broker to handle your mortgage application for the purchase. Make your holidays memorable, choose wisely and enjoys your time offs!

Buying and Paying for Your Second Home

When you already have a home of your own, buying a second home is more of a choice than necessity. So, the way you go about buying and financing one of these is also quite different. You tend to be more selective from various choices and review every aspect associated with the transaction in detail because you have the time and lack of urgency to do so.

Financing options

Steve Morgan at Bethany Beach Lender explains the differences in purchasing a second house. Interest rates and monthly payments are higher on these houses because lenders are aware that this is not your first home and you are not too worried about losing your shelter if mortgage payments are defaulted. So, they keep their payments high to keep their lending risks low. Show them your commitment to keep up payments by making larger deposits on the home. While other application procedures such as income and credit checks remain the same, the terms on which the loans gets approved differ.

You can choose to refinance on your first home, but only if you are confident that you can keep up with the increased mortgage payment on that along with the new commitment you will have in the form of your second home mortgage payment. Larger down payments can make you eligible for short term finances for about 15 years at low APRs. Others can go for the traditional 30 year mortgages. Many banks are happy to lend for such houses too, and as always, hiring a mortgage broker to deal with the shopping around, negotiations, and several application and closing documents makes the process all the more simpler and quicker.

Keep the loan term short so you can enjoy good mortgage rates, and go for this option if you know you can keep up with the payments. Try to avoid putting additional liens on your primary home and if you are a retired person, think more carefully before you use up your saved money in this venture. All said, with many people choosing to smartly invest their spare money in this manner and to have tax benefits, if applicable, buying second homes are a popular trend.