What are my Loan Options for Purchasing a Second Home?

If you choose the right loan option, a second home is a great way to invest in a vacation property, a place to spend the winter or the summer, or a home away from home. No matter where or why you purchase a second home, you must start with the financial side of things. Here are your loan options.

Lump-Sum Loan

A lump-sum loan allows you to borrow against the equity in your current home to invest in a second home. You receive the money in a lump sum, hence the name, and you can use it however you want. Whether it’s for a down payment on the second property, repairs or restoration, landscaping, or furnishing is up to you. This loan option requires fixed monthly payments that include interest and a portion of the loan balance.

Line of Credit Loan

A line of credit loan for a second home is like a lump sum loan in that it uses your current home’s equity, and you borrow against it. Unlike a lump sum loan, the line of credit gives you a certain amount of money that you can draw from over time to pay for what you need. You’ll have a maximum amount you can borrow, and you can draw as often as you need. This loan allows you to spend the money on your property investment as you go and as you need it.

Many people dream of owning a second home. When you’re in the financial position to invest in one, having the right loan in place is essential. Contact the lenders at Midland Mortgage Corporation for information on the one that’s right for you.

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