A second home can not only be an excellent getaway, but a great way to begin building your real estate portfolio. There are a few things you need to consider before purchasing your second home.
How your second home will be used is important to know before you purchase it. There are different types of classifications and rules that apply based on their use.
Many people buy a second home to vacation year-round or seasonally. In either case, there may be different rules that apply to the mortgage and/or insurance depending on the type of vacation property you’re interested in.
Type A Cottage
Winterized with year-round access is required,
Central heating, plumbing, potable water and electricity are needed,
The permanent foundation below the frost line,
The property is intended for occupancy at some throughout the year by the borrower or someone related. If related, it will be on a rent-free basis.
Type B Cottage
Seasonal access is acceptable,
A permanent heat source is optional,
It has running water,
It has a foundation that could be concrete blocks or pilings,
The property is intended for occupancy at some point throughout the year by the borrower or someone related. If related, it will be on a rent-free basis,
The property cannot be used as a full-time home.
Renting out second properties is becoming a popular trend with the rise of services like AirBNB and VRBO. However, it is important to know that you may not be able to do so depending on the property you wish to purchase. If you want to rent out your second home, let me know at the beginning as more research will need to be done regarding zoning, insurance, condo fees, and financing.
HOW WILL YOU USE YOUR SECOND HOME?
LOOKING FOR A MORTGAGE FOR YOUR SECOND HOME OR RENTAL PROPERTY?
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