If you want to own a place for weekend getaways and long lazy vacations every season, then you might want to buy a second home. The good news is that not all vacation homes are expensive. But even with a relatively affordable second home, you need to make sure your budget can handle the extra monthly payments for the mortgage principal and interest, property taxes, etc.
There are a couple of financing options available for those who want to buy a second home.
The first option is an all-cash purchase, which is the easiest method to pay for a vacation home. A home equity loan is also a good idea for homeowners with substantial equity in their property.
You can also go for a conventional loan, but you need to be prepared to make a larger down payment, pay a higher interest rate, and meet tighter guidelines for a mortgage on your principal residence. The minimum down payment for a vacation home is usually 20 percent. Regardless of what method you choose, make sure you start saving some cash first and then pay off all your debts before approaching a lender to review your options.