In Missouri, we see many hunters who want to get away from the city or sightseers who have fallen in love with our woodlands, cliffs, and fields and wish to purchase a second home. Before you do so, remember that there are different rules, requirements, and restrictions in place for each kind of loan program.

local realtorKnow Why You Are Buying A Second Home

Second homes appeal to homeowners for a wide variety of reasons. Before you purchase a second home in Missouri, understand your motivation. Do you want to create a weekend hunting paradise? Generate extra income through renting? Or all of the above while preparing for retirement in a place that you love?

Evaluating your needs and long-term goals will help you set realistic expectations while searching for a second home.

Understand Occupancy Rules

Second homes have occupancy rules that will help determine the best mortgage for purchasing the property. For example, you will need to spend a specific time there each year. Freddie Mac states, “The Borrower must keep the property available primarily (i.e., more than half of the calendar year) for the Borrower’s personal use and enjoyment.”

If you plan to rent out the home in your absence and spend less than half of the calendar year there, the IRS may classify the property as a rental property and not as a personal residence.

Mortgage Qualifications Are Demanding

Qualifying for a mortgage on a second home is more demanding than on your primary residence. You will need a larger down payment and must meet debt-to-income requirements to qualify. You will not be eligible for government-backed mortgages, such as Federal Housing Administration (FHA) and Veterans Affairs (VA) loans. Instead, you will have to look into private loans, such as a jumbo loan, to finance your purchase.

Set A Budget Before Purchasing

Even if you have been approved for a second home mortgage, you will want to sit down and crunch the numbers to make sure this purchase makes financial sense. A second home means more financial responsibility, such as:

  • Maintenance and repairs
  • Security to keep the property safe when vacant
  • Additional insurance
  • Property taxes

Know your price range and carefully review your finances before committing to a second home.

Work With Local Realtors

Working with local realtors in your desired area will be beneficial in finding the second home you want. They will be able to guide you to properties that fit your needs and budget. They will also intimately know the areas in which you plan to purchase.

When it comes to finding a second home in Missouri, trust the experienced experts at Merchant of Homes.

Start Your Search For The Perfect Home Today

Contact Eric Merchant At 314.541.1218