You should consider a few facts prior to purchasing a Poconos Vacation Home. One out of three-10 homes sold in 2007-10 was a vacation home or investment property, indicating demand for second homes remained strong despite a slow housing market. The reasons for buying a second home are many and range from recreational and vacation enjoyment to investment to retirement planning.
Since it is a "buyer's market" in the Pocono Vacation Home market, now may be the time to buy that second home that you have been considering. Whether you're dreaming of a home that you will consider for relaxing or or for the long term growth in profit, start with considering these four steps:
Information Aout Second Home Onwership
Median age of vacation home buyers: 46 (baby boomers own 57 percent of all second homes)
Median household income: $99,100
Median price of second home $211,000
No. 1 reason for buying: Family retreat
No. 2 reason: Future primary residence
No. 1 location to buy: Within 2 hours of primary residence
Most popular type: detached single-family homes, followed by townhomes and condominiums
Most popular area: suburbs, followed by small towns, urban areas, resort and vacation areas
Vacation Home Buying Tips
1. Decide Your Main Reason For Buying a Vacation home
Most vacation home buyers want an active vacation spot, an sound rental investment property, a future retirement home or some combination of these. Before you begin to look, you should decide on the priority of these reasons and how the home will fit into your lifestyle along with a good idea of how often you will use the home.
2. Find And Work Closely with an Experiences Poconos Real Estate Agent.
For second home b working with a seasoned, knowledgable local Poconos real estate agent or broker is imperitive. Do not wait until you are here to set an appointment. The good ones will be booked days or weeks in advance. To get the best benifit of working with an agent, begin before you come, ask for a list of homes that meet a list of criteria that you create prior to a visit. This helps keep the emotionality out of the purchase and give the agent time to research all (including the last minute listings) the homes that might work for you.
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3. Get Mortgage Preapproval from Your Local Bank AND a Local Poconos Bank.
You will want to decide, in advance of looking, on the down payment and monthly payment you can afford. Even if you are counting on rental income to pay for a some of your mortgage, don't get in over your head. And a preapproval with help you convince the seller that you are serious. We can not tell you how many of our customers over the years have said " I wish I would have gone with a local Poconos Bank that knows the market and understands second home buyers." Most major banks and ALL mortgage brokers do second home mortgages as an after thought. This means they are unprepared on how to process them.
4. Talk to Your Accountant About How a Second Home will impact your taxes.
Usually second home ownership will help you defer taxes to the future and often at a lower tax rate. This is important to understand and may impact the price range of a vacation home purchase. For instance, if you rent your vacation home, but stay in it at least two weeks a year (or more than 10 percent of the time it was rented, whichever is longer), you can deduct your mortgage interest and property taxes. An investment property or a home that's rented out and never used for personal pleasure will be subject to different deduction standards, so check with an accountant.
Tips for Getting a Mortgage on Your Second [City] Property
Are you buying a Poconos property as your second home? Not uncommon as about 1/2 of the sales of homes in the Poconos Mountains are vacation or second homes. Perhaps you are looking for a small cottage or apartment where you can escape to for your vacations, or maybe you want to have another home closer to your relatives. Maybe you want to rent out your second property and make a steady income from an investment. Whatever the reason, a second slice of real estate can be a fantastic investment. However, sometimes getting a mortgage on your Poconos second home can be a challenge.
Generally, a mortgage lender will have tougher standards for second home loans than primary home loans. This is because usually when you are buying a second home your finances will be stretched thinner and you will have less money to spare because you are already paying a mortgage on your primary home. This will mean that your second home mortgage can be harder to get and might have a higher interest rate.
Here are some tips to keep in mind that will help you to get the best mortgage on your second property:
Use a local Poconos lender. This is the most important advice we can give. Local lenders know the market, they are mostly smaller backs in GREAT financial shape and are less afraid about having to take the home back as they can MUCH more easily sell it than some big bank located in Texas (or where ever, you do get the point) In addition, local banks here in the Poconos have been doing second / vacation home financing for many years with great success. Banks like ESSA, Penn Security, Keystone, Wayne Bank, have experience with second homes and know the process. Take it from one who has over 1100 transactions and has seen buyer throw up their hands in frustration at the "BIG" city banks.
Build up a decent amount of savings. Your mortgage lender will want to be able to see that you have a large amount of savings so that you will have enough to pay for the mortgage even if you were to lose your job.
Pay off any credit card debt . Many lenders will be hesitant to approve your second home mortgage if they see that you have a lot of debt on your credit card. They will want to see that you have a low debt to income ratio so that you will be able to pay back the loan.
Use the first mortgage as a good reference. If you have always made your payments on time and you are most of the way through paying off your first house, you could ask someone from your current mortgage company to vouch for you. The lender for your second mortgage will be reassured that you are a reliable person to loan money to.
These are just a few tips to keep in mind in order to make getting a mortgage for your second property as easy as possible. To find out more about investing in Poconos Mountains property, contact me at USARealty@USARealty.net or phone me at 570-517-2428 today.