Mistakes To Avoid When Buying A Vacation Home

Thanks to aging Baby Boomers, the market for vacation properties is hotter than ever. But before you start shopping, here are some things to consider.

Location. Obviously, it’s got to be in an area you love. But make sure it’s also easy to get to. If it’s more than three hours away or involves bad roads or unpleasant boat trips, chances are you won’t use it often.

Reason you’re buying. If you’re buying for personal use, buy where you want to be. If you’re buying for capital appreciation, look for local market growth potential. And if rental income is the goal, make sure the property’s in a popular area.

Seasonality. If your property depends on seasonal recreation, keep in mind that you’ll occasionally be disappointed. Ski cabins can suffer through snowless winters, and beach houses are prone to rain. Also, make sure roads are plowed year-round and ferries run in the off-season.

Cost. Obviously, a lot in the woods is less expensive than a beachfront condo. But building on your lot isn’t necessarily cheap (count on about $150 per square foot). And even if you buy an existing cottage, there are ongoing costs for maintenance, repairs, taxes, supplies, and insurance. Renting when you’re not there or fractional ownership can reduce the cost, but they can also impact financing.

Financing. In the past, purchasing a vacation home meant higher interest rates and less flexibility. But today, specialized lenders offer vacation home mortgages at mainstream rates, and if you have strong credit, you may even qualify for 5% down. However, many of the most affordable mortgages require year-round access and well/septic systems, and they don’t cover rental properties or fractional ownership.

Are you thinking about buying a vacation home in the next 12 months? If so, I invite you to call us so we can determine if this is the right time to buy, what type of properties fit within your budget and whether or not it’s worth the investment.  As your mortgage professional, we have access to a wide range of vacation home mortgages and can provide you with the advice you need to avoid costly mistakes.


Buying a new home or refinancing your current loan? Our experienced team of loan originators is dedicated to making that a reality. At Ideal Lending, you will work one-on-one with a dedicated mortgage loan officer who can explain loan programs and offer great mortgage rates to meet your financial goals. Contact us today!

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