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Saturday, May 30, 2009

looking for a 2nd home?


If you are thinking of purchasing a second home, here are some tips to help you with the practical aspects:
Neighborhood
Take the same things into consideration as you would when buying a primary residence. Is the location desirable and close to amenities you need? Does it meet your list of needs and wants? In addition, you should consider how long you plan to keep the property, and how well it will suit your needs as they change with time. A remote lakeside cabin may be a great retirement choice, but if you have a young family, you should probably look for something closer to a town. If possible, spend some time in the community before you purchase.
Financing
Financing a second-home purchase may be a little tougher than buying a first home. Typically, lenders assign a greater degree of risk to a mortgage loan for a second property because it may spread your finances thinner and you could be more likely to default on a second place in troubled times. Lenders may require a larger down payment and charge as much as a half-point more in interest than for a primary home -- as much as two percentage points higher if it is an investment home. One way to keep costs down is to use a home equity loan on your primary home to help finance your second property.

Home inspection
Don’t purchase a second home without having a qualified home inspector look it over. In some vacation areas, termites, mildew, leaky roofs, inadequate septic systems are major concerns.
Security, maintenance and insurance
Since you are likely to be away from your second home for long stretches of time, you should take extra security measures. Consider enlisting the services of a local handyman or a neighbor to collect mail, keep an eye on the place and take care of routine maintenance jobs such as leaf and snow removal and mowing the grass. Ask a neighbor or the caretaker to park his or her car at the house occasionally, and use light timers to create the illusion someone is home. An alarm system is a good idea as well. If your second property is a condominium, most of your insurance and security needs will be covered by your condo fees. You will still need liability and contents coverage, however.

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