Second Home Mortgages

Exclusive Summary About Second Home Mortgages by Marcus Peterson and Bob Waun

Many people use mortgages to apply for loans. Many people that already have a mortgaged home and want to buy another one use second home mortgages.

Many Banks think that second home mortgages are likely to go unpaid. The borrower’s credit card history and loans are investigated, and an assessment of their first mortgage is required. These factors combined may determine if the borrower qualifies for the amount they need.

Second Home Loans are Different

The National Association of Realtors reported that nearly 1/3 of all homes sold in 2005 were second homes.

Second homes by nature require higher debt-to-income ratio allowances, because the buyer/borrower must be able to afford 2 homes. Second homes often have unique features, like unique design (log homes, unconventional floor plans) or unique locations.

Will a borrower default if he cannot rent his second home?

For all these reasons, lenders who want to serve this market need to specialize in second home mortgages and fully understand the risks of vacation home lending.