Second home mortgage requirements

The most important requirement of second home mortgage is that you should deposit at least a 10% down payment. It is a non-negotiable rule.
Borrowers may be approved with:

• A credit score of 680 or higher
• A credit score of 640 – 679 with a down payment of 25% or more.
• A debt-to-income ratio up to 45%

For instance, if your credit score falls above 640, you can make a bigger down payment. Or if you have higher debt-to-income ratio, you can make up for it with an excellent credit score and 12 month cash reserves. This results in more chances of qualifying for a second home mortgage.

Property requirements for second home mortgage

The property should be occupied by the owner through some time of the year. As it is the foremost rule, the home should be occupied part time.
• It should be a one unit home.
• It should belong solely to the buyer
• It should not get rented full time.

According to the requirements, the property must not be used for finance purposes while it is as second home mortgage and or rented out as full time. You must stay there for part of the year.
For instance, if you rent the house, it is considered to be an investment property rather than a second home, it would have higher interest rates and different loan requirements. To be considered as a second home, it must be at some distance from your primary residence. This requirement may vary by lender.

Second home mortgage down payment

To get a loan on second home, you need a down payment of at least 10% while keeping in mind the restrictions.
On conventional loans, down payment for primary residences can be as low as 3%. Some lenders require 20% or more for second homes. According to research of National Association of Realtors survey found that buyers who finance a second home typically put down 20%.

Second home mortgage calculator and rates

Mortgage rates are higher for second homes and investment properties than for the primary residences. In general, investment property rates can be 0.5% to 0.75% higher than market rates. If lenders consider the property as second home, a borrower who puts down 20 percent could expect an interest rate of 4.125 percent for a 30-year fixed-rate loan.
You should compare offers from at least 3-5 different mortgage lenders, look at their fees and annual percentage rate (APR) as well as the quoted mortgage rates.
To make sure you qualify in the first place, take a look at your assets, credit, and income.

Find out More Information about Second home mortgages with the Ability Mortgage Group in Maryland at 410-827-5111