Second Home: If this will be a second home for your family, you’ll need to budget for the down payment, mortgage, property taxes, insurance, and any other ongoing costs. Having a beach property can be rewarding, but it’s essential to be clear on monthly and annual expenses.
Second Home with Rental Income: Planning to rent out your home part-time? This can offset your costs significantly. You might qualify for a second-home mortgage if you only rent the home for part of the year.
10% Down for Limited Rentals: You may be able to put down as little as 10% if you only rent out your beach house for part of the year. There are restrictions on how often it can be rented out, so verify this with your lender.
20% Down for an Investment Property: For a home that’s rented year-round, you’ll likely need to classify it as an investment property, which typically requires a 20% down payment.
Calculate the Rental Income: To make sure the investment makes financial sense, calculate potential rental income. Ideally, you’ll want to rent the property for close to (or more than) your mortgage payment each month.
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