Second Home

In today’s housing market, owning a second residence is not uncommon. Before purchasing a second home, it’s important to know the difference between a second home and an investment property. Although they may seem the same, they are not.

A second home is exactly that, a second home. A second home is a residence where the homeowner lives and does not rent it out. Borrowers who purchase a second home are not supposed to lease the place, not even through VRBO or Airbnb. In the past, second homes carried the same rate and down payment requirements as primary home purchases; however, that has changed with a few lenders. Fannie Mae and Freddie Mac increased second home rates as they began to experience borrowers using their second homes as rental properties.

On the other hand, investment properties are purchased for the sole purpose of leasing/renting out the property and are not occupied by the borrower. Investment properties typically carry a much higher interest rate than primary and secondary residences.

The Team at Indigo Mortgage has made it our goal to lower rates for borrowers on second homes. Our interest rates for second homes are slightly higher than primary residences. If you are in the market for a second home, reach out to us. We are here to help you every step of the way.

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