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How can you afford a second home?

Posted by Article Author on March 3, 2017
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Most people think of second homes to be vacation kind of homes. But naturally, you need a certain luxury in life to afford something like this. So what can you do to own a holiday house someday?

afford a second home

Here are a few suggestions on this:

  • Save a lot of money: Saving comes first and foremost. Yes, there are Home loans that you could take. But do this only if you don’t have any pending loans or unpaid debts. It’s natural that a second home is going to make a hole in your pocket, but if you have thought about buying one anyway I guess you would have done a little introspection.
  • Know what you’re going in for: Buying a home means you’re in it for a long haul. At some given point in time, you will be the sole owner. Maintenance takes quite a huge amount; make sure you have saved up enough for this.  And be realistic enough to know the kind of house you could offer.
  • Conventional Mortgage: Any loan or lending of money that is not guided by a government entity is called as Conventional Mortgage. You could go in for this but it is a risky option as most of the lenders require a down payment which is a minimum of 20%. And for this, you’d need to save up again.
  • Buy a resale house: This is the easiest method to adopt if you aren’t looking for a “vacation house.” Resale houses are generally much cheaper as they come with a number of blemishes. So it would be smart to purchase one and clean up whenever necessary if you aren’t in that much of a hurry.
  • Strike a double deal: If you have gone in for a conventional loan on your first house you can try to strike a deal and get a loan for the second from the same lender. This could effectively reduce your interest rates.
  • Figure out what you want: Do proper researches before you jump into any situation. Get an agent or guide to help you through this process. Buying a second home is obviously going to create a hole in your pocket so you need to be sure about what you want first.
  • Loans: If you aren’t taking a conventional loan but a legit one then do your research there as well. Make sure you go a bank which has a low-interest rate or affordable EMIs. With the real estate market going up and down it’s important to keep a look out for this.
  • Renting existing property: if you have a vacancy in your first home, maybe you could rent it out to get a little income out of that. You could rent out the entire house if you have another place to live that is.

Ask yourself a few questions before you go in for this. Do you really need a second home? What are you going to do with it? Is it a feasible option for you? If you are thinking of renting it, will you get a good payment for the area you have chosen? If all these questions have appositive answers then I think you are good to go.

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