Your Lake of the Ozarks Mortgage Lender: What You Need to Know About Financing a Second Home

If you are thinking about buying a vacation home at the Lake of the Ozarks, one of the best options can be to secure financing for it. In fact, when financing the purchase of a vacation home 45% of buyers and 47% of investor’s financed less than 70% of their purchase (according to a study by the National Association of REALTORS® Research Department). If you are considering buying a second home at the Lake of the Ozarks, here are a few reasons you should consider getting a mortgage on it.

What Financing Options Are Available?

There are two paths to take when financing a vacation home. A popular option is to take out a conventional mortgage loan on the new property. Another option is to take out a home equity loan or home equity line of credit (HELOC) on an existing property. Here are a few highlights about each home loan type:

Conventional Loans for a Vacation Home

You can apply for this type of loan with Team Lasson, and the process will be similar to paying a mortgage for a primary residence. You will need to put down an initial down payment, and then a payment plan will be initiated over a span of 10-30 years. These loans can also come with either a fixed or adjustable interest rate.

What is the biggest difference between a conventional loan for a second home and the mortgage for your primary residence? A second home loan will generally require a larger down payment (often between 10-25%). Another difference is that if you plan to use this home as an investment property and not a personal vacation home, you will need to look into investment property financing instead, which can carry a slightly higher rate and down payment.

HELOC

A home equity to finance your vacation home is the second option, with a few ways to accomplish your goal. The most popular is the HELOC, which is a line of credit that is backed by the equity you have in your home. This will count as a separate loan but usually offer variable interest rates.

If your home’s value is on the rise, you could also consider refinancing your existing mortgage into a bigger loan. Then you can spend the difference on your second property.

Vacation Home Down Payment

While there are some options for zero-down payment loans, the chances of securing them for a second home is rare. When considering that you will have to make a down payment, it is important to find ways to keep it in budget with the best terms for your situation. The National Association of REALTORS® showed that around one-fifth of buyers use equity from their main residence to finance the down payment on their second home. Team Lasson can help you with any of these options.

Goals For Securing a Vacation Home Mortgage

If you are planning on a vacation home mortgage at the Lake of the Ozarks, there are a few things you need to know as you prepare:

Good credit
Ability to make a down payment
Qualifying savings
Low income-to-debt ratio
Proof that it is a vacation home

Start Looking at Your Options!

Team Lasson takes great pride in helping you purchase your vacation home at the Lake of the Ozarks. Do you have questions about a second home mortgage? We were voted the best mortgage company in two different survey’s, the Best of the Lake and Missouri’s Best. If you are ready to get started, you can visit our website to fill out an application. We look forward to helping you purchase your new home!