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How to Finance a Second Home Loan in St. Louis
If you are one of those lucky individuals who has a steady job, good income, and a cash reserve in your bank account, you may be able to afford a 2nd home loan in St. Louis. You are not alone in this; last year vacation home sales increased up to 7.9 percent. For instance, let’s say you have been dreaming of a lake house for the past couple of years. Before you make that decision you want to confirm that you can afford a second home loan in St. Louis. With low interest rates and eager sellers, this would be the perfect time to get your fantasy second home.
The very first step toward obtaining this dream is to find a local lender with whom you can discuss the pros and cons of your home loan in St. Louis. You will need to consider all the expenses that go into getting a lake house, such as taxes, insurance, and maintenance fees. It is crucial to understand that there are more costs involved than the up-front mortgage and closing costs. Another obstacle you have to keep in mind is how the property will hold up during the off-season. For example, the lake house may stand up magnificently in the summer time. However, when the snowy season arrives, you will need to maintain the house during the cold weather. If you feel you can afford all of these expenses, you are ready to get your vacation property.
There are three options to getting a 2nd home loan in St. Louis; a traditional vacation home mortgage for your new property, mortgage refinance, or 2nd mortgage on primary property. One of the biggest disadvantages is that the interest rate is higher than a traditional loan. You will need to prove to the bank that you can carry a 2nd home mortgage.
If you have substantial equity on your primary home, consider getting cash out refinancing. The downfall of this option is that there is a whole new round of closing costs which could run 3 to 6% of your loan amount.
A vacation home could be financed as a fixed rate home equity loan or an adjustable rate home equity line of credit (HELOC).
If you are one of those lucky individuals who are able to pay cash upfront for your 2nd home, you can use that money towards fulfilling other dreams. Get preapproved today by filling out an online application on our website.