Buying a second home can be both an exciting and daunting idea. Having one mortgage payment may be doable, but can you afford a second house payment for a vacation home? Surprisingly, it may be easier than you think to buy a cabin for your weekends.
1. Know Your Budget: Understanding your budget and current expenses is key to buying a cabin without questioning yourself. If you have enough money left over at the end of each month to be able to afford a second home and all its expenses, including, but not limited to, mortgage payment, taxes, HOA fees, insurance, and utilities, then you should have enough room in your budget to comfortably make the purchase.
2. Imagine It: As silly as it may sound, for some people it helps to imagine yourself and your loved ones in the home. If you can picture holidays and summer vacations spent in this new home and feel good about it, then you will not second-guess your purchase later.
3. Get an Inspection: As with any home purchase, pay for a quality home inspection. You want to make sure that everything is up to code and in good repair. While no home is perfect, you want to avoid any expensive surprises down the road, particularly at a vacation home that you only frequent on the weekends. A furnace going out when you are three hours away is never a fun prospect.
4. Understand the Value: More than your primary residence, a second home should be viewed as an investment. As such, you should know the value of the home. While you may know the value of homes where you live, you are probably unfamiliar with markets in other areas. This is why it is important to hire a good real estate agent to help guide you through the purchase process in a market that they know well. This makes it easier to evaluate the cabins for purchase to find the right one for your family.
5. Get a Great Rate: Interest rates are low. Due to a variety of economic factors, interest rates for mortgages are hovering around three to four percent and are expected to stay that way into 2020, according to Forbes. Depending on your viewpoint, a lower interest rate could reduce the monthly payment, increase your overall budget, or even allow you to switch from a 30-year mortgage to a 15-year mortgage. Talk to your mortgage professional to discuss all of your options.
Buying a cabin can be a great investment in both real estate and quality family time.