How Do I Get Approved for a Mortgage for a Second Home?
Having a vacation home or a home in another area of the country is a dream for many people. Obtaining financing for a second home, however, is not an easy task. Lenders fear a second home mortgage will be the first loan to not be re-payed in the event of a job loss or financial difficulty. Financing a second home will require you to prove your financial stability and may be a longer process than when you financed your primary home.
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Instructions
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Save as much money as possible for the down payment. A mortgage for a second home will require a larger down payment than required for the primary home. Plan on a minimum of 20 percent down. A greater down payment may be required if your credit history has blemishes.
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Pull copies of your credit reports from TransUnion, Equifax and Experian. Review the reports carefully for any errors. Dispute any errors you find. When applying for a second mortgage, you need to have as good of credit as possible. Visit Annualcreditreport.com to pull your credit report at no charge. (See Resources.)
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Contact local mortgage lenders to inquire about the process required for financing a second home. Many lenders will not even consider a second mortgage loan, which is why you should be prepared to reach out to multiple lenders. You want to be able to shop the available lenders for the best possible interest rate and loan situation.
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Provide each potential lender with the amount of loan you would like and your financial information. If you have a specific house in mind, provide the lender with the details on the house. Tell him the amount of money you have for a down payment.
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Discuss the loan with the lender. She will advise you if your situation will qualify for a second mortgage. If not, she will advise you of what specific steps you should take. This may include looking for a second home under a specific dollar amount, saving additional funds for a down payment or fixing items on your credit report. Complete the application process if you currently qualify for the second mortgage.
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References
Resources
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