Vacation Home Mortgage
in California
- 5-Star Rated Mortgage Broker
- Investment property loan program
- Second home mortgage loans
- Be the owner of your vacation
- Office located in Los Angeles
What type of property are you refinancing?
Single Family
Multifamily
Condominium
Townhouse
How will this property be used?
Primary Residence
Vacation Home
Investment Property
Estimate credit score
Excellent 770+
Good 660-719
Avg. 620-659
Below avg. 580-619
Poor <579
How can we help you today?
Home Purchase
Refinance
What type of property are you purchasing?
Single Family
Multifamily
Condominium
Townhouse
Are you a first-time home buyer?
Yes
No
How will this property be used?
Primary Residence
Vacation Home
Investment Property
Estimate credit score
Excellent 770+
Good 660-719
Avg. 620-659
Below avg. 580-619
Poor <579
Final Step
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Summary
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Getting a Mortgage for a Vacation Home
Have you ever dreamt about having perfect holidays but don’t have money for a vacation or summer home somewhere in California? Nowadays Californian’s favorites vacation rental destinations are Santa Barara, Big Bear Lake, Lake Tahoe, Mammoth Lakes and Oceanside (near San Diego).
Having a place of your own where you can escape whenever you feel like it sounds like a dream! A dream can easily become a reality if you apply for a vacation property loan.
Avoid the hassle with booking hotels and have 100% control over your spot! We can help you with purchasing or refinancing your vacation home loan in Los Angeles and California.
Invest in Real Estate Today
Make your dream come true! Do you have any questions so far?
Call us for a free consultation
Investment Property or Vacation Home?
Before buying a vacation home, there are some points to consider:
- The property must be occupied by its owner for at least some part of the year.
- The house cannot be rented full time, and it must belong solely to the buyer.
- This must be a one-unit home.
- The house must be some distance away from your primary residence.
- You may not use the income from renting a house to qualify for this type of loan.
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Hours: Monday-Friday 10:00 AM - 5:00 PM
In-Person at LA Office
13317 Ventura Blvd #H, Sherman Oaks, CA 91423
Cell-phone
M-F 10 AM-5 PM (PST)
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E-mail: contact@idmortgagebroker.com
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The Benefits of Owning a Vacation Home
If you think that a vacation home is just for summer and is a useless investment, hear us out. This can be a considerable investment in the future of your entire family. Consider the advantages of purchasing a second property in California:
A place for a get-away
Long-term profit
Most vacation properties are located in popular areas, and thus they are more likely to retain their value. However, research price trends in the place where you are planning to buy a house, access to highways, restaurants, etc.
Retirement plan
Increase your tax break
Vacation Home Loan Process
Four easy steps to your second home:
Step 1
Pre-Qualification
Talk to Us to Know Your Options
Step 2
Find Your Dream Home
Enjoy a Home Shopping Experience
Step 3
Pre-Approval
Get a Loan Approval on the Terms You Want
step 4
Closing
Enjoy Your Homeownership
How to Qualify for a Vacation Home Loan? Requirements
The credit score of 720-740 is perfect, but you need to have at least 600 to qualify for a financing program.
Income to support both properties
Ideally, your monthly payments should not be higher than 43-45% of your income. This includes paying for both of your properties and any other payments such as car payments or student loans. For example, if your income is $10,000 before taxes than all your loan payments summed up shouldn’t be more than $4,500.
A proof that it is a vacation home
The lender will want to know whether the house will indeed be used for vacations only and not rented out. Because financing requirements of a vacation home are more lenient than for investment property some borrowers want to trick the lenders. To prove this your should live at least 50 miles from the vacation home.
More money for a down payment
The down payment is higher than for the primary property. While you can purchase a primary property with as little as 5% down payment, you will need to put down at least 10% for a vacation home. Also, if you put down 20%, you will get access to the best possible rates. If you don’t have reserves on hand, you can borrow your down payment.
Additional finances on hand
If you want to get your loan approved you need reserves for at least two months’ worth of expenses. Moreover, if you are self-employed, you might need money for at least six months.
Apply for a Vacation Home Loan
Applying for a vacation home loan is for those who are wary of spending time in vacation rentals and hotels and want to have their own place. If you plan to live in the home, then you are eligible for an owner-occupied home loan, which is preferable for mortgage lenders.
In addition, we can help you with refinancing your second home and reducing mortgage monthly payments. A vacation home is a wise investment, especially in Los Angeles and California.
Vacation Home Loans in California FAQ
How do vacation home loans differ from primary residence mortgages?
Vacation home loans finance secondary properties where the borrower does not live full-time. They usually require a higher credit score and down payment than primary residence mortgages. Additionally, they might have higher interest rates since these properties carry greater risk for lenders due to potential vacancies and unpredictable rental income.
What credit score do I need to qualify for a vacation home loan?
Most lenders prefer a minimum score of 680 to provide favorable or average interest rates on a vacation home loan. A few might consider going down as low as 620; however, the terms will not be favorable, and the interest rates will be much higher. Therefore, try to improve your score to get better terms at the time of application.
How much of a down payment is required for vacation home loans in California?
Lenders typically require a minimum down payment of 10% to 20% for vacation homes. The better the interest rates, the larger the down payment required. For that reason, planning at least 20% can help reduce overall borrowing costs.
Can I rent out my vacation home to offset mortgage payments?
Yes, many vacation homebuyers rent their vacation homes out to help defray the cost of the mortgage. Most lenders have some restrictions, such as the owner has to occupy the house a certain number of days per year. Ensure your loan terms allow renting, and check in with local regulations regarding short-term rentals.
What is the difference between a vacation home and an investment property for financing purposes?
Personal use refers to a vacation home, even though that might sometimes be rented. An investment property has been purchased to earn rental income or sell to obtain profits. Lenders consider investment properties riskier and take higher down payments with more rigid lending standards than vacation homes.
What are common challenges in obtaining a vacation home loan, and how can I overcome them?
The challenges are: higher down payments, very strict credit score criteria, and formidable financial reserves. To increase the possibility of securing loans:
- Save for a higher down payment to obtain better rates.
- Pay down debt and clean up errors on your credit report to further improve your credit score.
- Keep your income stable, with enough savings to show your ability to handle more than one mortgage.
Can I refinance my primary residence to buy a vacation home?
Refinancing your primary residence to pull out equity can provide the funds for a vacation home purchase. However, this raises your overall debt burden, so make sure you can handle both mortgage payments comfortably. You may want to discuss with a mortgage broker or a financial advisor how refinancing will affect your situation.
How can I prepare financially to buy a vacation home in California?
Begin by thoroughly assessing your budget, considering both the upfront costs (down payment, closing costs, inspections) and ongoing expenses (maintenance, insurance, property taxes). If you plan to rent it out, research local regulations and market demand. Work with a mortgage broker to evaluate different loan options and ensure your finances align with the additional mortgage commitment.
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