If you’re thinking about buying a vacation home, you should read this. If you’ve fallen in love with a beautiful area and thought, “This is the place to buy a vacation home,” you should read this. Maybe you’ve found one of the beautiful Outer Banks real estate properties and realized the search is over. You’ve waited for this moment, the time has come. You can only plan for so long before you need to jump in and go for it because life is too short to be waiting for that perfect day or to always be wondering, “What if?” In order to keep that dream alive and it not turn into a nightmare, here are some steps to consider before ever looking at vacation properties. By taking the time and energy to do your homework up front, the effort will greatly pay off in helping to find smoothing sailing to your desired destination.
1. Check your credit report and your credit score. Make sure there are no errors on your credit report. If there are errors, get them resolved before you proceed in your search for your vacation home. Your credit score will have a huge impact on the lending package you are able to secure.
3. You are now ready to talk to a mortgage lender to determine how much you are qualified to borrow. Most conventional loans today require anywhere from 10 to 30% or more down depending on the size of your loan and the planned use of the property. Second homes generally have more advantageous lending terms than investment properties (those homes that will be purchased as vacation rentals).
4. Make sure you compare terms from various lenders to get the lending package that works best for you. The lending packages may include: origination fees, points, varying terms, varying interest rates, mortgage insurance, and other fees that will affect your determination as to the best package for you. Compare the packages side by side to analyze the offers and choose the lender and terms you feel most comfortable with.
5. Once you have selected your mortgage lender you should secure a pre-approval or pre-qualification letter. This will pave the way for you to make an offer on your dream home by offering the seller objective assurance that you will be able to get financing to purchase the property, and thereby smoothing out the closing process for both the buyer and yourself.
Whether you’re looking in the mountains, the plains or even right here for the opportunity to purchase a real estate investment on the Outer Banks, we hope you’ll find these tips helpful in your journey. Preparing and planning for your vacation home now will save time, money and headaches down the road. Know you want a retirement home but not exactly sure where to look? Check out the Outer Banks real estate market that is no stranger to income generating vacation homes on the beach. The area was recently named one of the best family beach vacation destinations in the country and the market is growing strong.
Remember to check out our blog for more tips on home buying and selling as well as information about living on the Outer Banks.