Fact or Myth: You Need a 20% Down Payment to Purchase a Second Home
What’s the minimum you can put down to be able to purchase a vacation home or a second home? This is a question that buyers ask frequently.
The myth is that you need to put down 20% to be able to buy a vacation home. But the reality is that you can purchase a vacation home with as little as 10% down.
It should be pointed out, however, that in this environment of rising interest rates, the more money you put down, the lower your interest rate and the better your terms will be.
There are multiple ways that you can put additional monies down. Maybe you have 10% of your own cash but you want to get to 20% or 25% to have the best interest rate.
We’re seeing people who have actually borrowed against other investments. These people are diversifying, meaning they’re taking cash that they’ve earned from the stock market to put additional funds down. Some people are doing a home equity line of credit to have additional monies to put down to obtain the best interest rate.
Have other questions related to real estate, especially in the Maryland and Delaware area? We’ll be happy to sit down and talk with you about any questions you may have.