LBI Real Estate Second Home Financing

The Facts About Second Home Financing on Long Beach Island

LBI Real Estate Second Home Financing
LBI Real Estate Second Home Financing

Financing Long Beach Island Real Estate

There are many ways to obtain financing for a home on Long Beach Island and LBI real estate second home financing is a topic it should be thoroughly understood before beginning a home search. Lenders and banks view loaning money on a second home somewhat differently than a primary real estate market. Generally speaking, second home loans are considered to be slightly more risky for a lending institution. Therefore, it is not uncommon to see stricter qualification standards for buyers applying for a second home mortgage. It is important to understand that loan requirements will vary greatly depending on the individual and the lending institution, however there are some common traits a buyer can expect to see. For example, the minimum down payment for almost every second home mortgage is 20%. There are additional ways to finance a second home in the LBI real estate market, the most common of which is simply paying cash.

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LBI Real Estate Second Home Financing

There are two primary sources of financing a second home in the LBI real estate market. They are:

  • Obtaining a mortgage
  • Paying cash for the home

When seeking to obtain a mortgage for a second home on Long Beach Island, I recommend working with the local lender. Local lenders have a better understanding of the shore environment and they  have the knowledge needed to close the transaction. Lenders will examine many of the same factors as they would to qualify a borrower for primary residence. These factors include the debt to income ratio, the loan-to-value ratio, the borrowers income and borrowers credit score. A lender may also consider the potential rental income for a property to help qualify for the loan. It is important to understand that not all properties will be eligible for a second home mortgage. The most common difficulty we see are motels that were converted to condos and are under 400 square feet. These properties will require special financing as they do not fit the conventional picture of a second home.

Paying cash for a home may seem out of reach, however there are some creative financing methods to accomplish the goal. A personal line of credit or a home equity loan coupled with an individual savings account or other investments may be able to be combined and purchase a home outright. This can save time and money and ultimately could result in a lower sales price for the home. Once the property is owned, the loan could be consolidated or refinanced to pull money back out and invest in other methods.

Buying a Home in the LBI Real Estate Market

Buying a home on Long Beach Island is a major financial investment. It is important to understand LBI real estate second home financing to ensure that you can comfortably afford to purchase. The very last you want to do is overspend for a house or purchase a home that is too expensive to comfortably afford. There are a number of property styles in many different price ranges, and it is important to look at all options and their ultimate cost to ensure is the right investment for you. Financing a second home on Long Beach Island requires an understanding of the market, however there are many excellent products with competitive interest rates to make the process seamless and affordable. For more information about the LBI real estate second home financing for the LBI real estate market in general, CONTACT ME and I will respond right away.

By : Nathan Colmer | The Van Dyk Group

Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com

www.BuyLBI.com

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