Let’s be honest – if you’re reading this article and even considering a second home, chances are you’re in pretty decent financial shape. Buying a home is a big undertaking, and an increasingly expensive one, so to even be able to consider buying a second one as a weekend or winter getaway is a privileged position to be in. Still, just because you’re in a pretty good position doesn’t guarantee you success, which is why you’ll want to follow these four steps to seal the deal.
- On Track for Retirement
Never lose sight of saving for retirement. It is, along with your children’s college funds, the single most important thing for which you can save money. That said, if your retirement funds are already in good shape, you can start to look at funding other projects, such as a second home.
- Upkeep and Maintenance
Think about how much money you spend maintaining your primary home. Now extend that same thinking and budgeting to a second home. Can you afford that? Second homes are often smaller, and purchasers sometimes think they can save money by buying a fixer-upper at a fraction of the cost of other properties. That isn’t a bad cost-saving move up front, but remember that repairs cost money, too, so make sure you budget for that as well.
- Easy Payments
Maybe you think you can rent the property out when you aren’t using it to make affording it more easily. If so, you’ll want to pump the breaks on that a bit. While there isn’t necessarily anything wrong with this idea, you shouldn’t be dependent on others’ rent to afford the home. Make sure you can afford it on your own.
- Tighter Mortgage Standards
Getting a second mortgage for a second property can be even harder than the first time around. Make sure you are prepared to meet these tighter standards. Obviously, you’ll also need to make sure your first mortgage is in good shape before you go speaking to lenders about a second one.
By heeding these simple tips, you can make your dream of a second home that much more attainable.