Usually, the bank can answer this question for you. These days, banks are sticking to strict standards when it comes to lending. This is why there’s no need to worry about making the wrong decision about buying a second house. If you don’t have the income, you will not get the loan.
For most borrowers, banks will extend a monthly allowance for debt that does not exceed 36 percent of their gross household income. This means that your existing mortgage, your car loan and any alimony, student loans or ongoing credit card payments cannot exceed 36 percent of your income. So that second loan has to fit into that 36 percent. It’s a very straightforward formula that helps you determine whether or not you can afford a vacation home.