Vacation Homes And Second Homes – Hard Money Loans, Bridge Loans
To schedule a free loan consultation, please call (254) 230-0012 (for loans in Texas) or (503) 222-4466 (for loans in Oregon and other states).
If you’ve been dreaming of buying a vacation property or a second home, but haven’t been able to find financing, we can help!
Challenges Of Getting A Vacation Home Loan Or Second Home Loan From A Traditional Lender
When it comes to getting a loan from a traditional lender, bank, or mortgage company for a vacation home or second home, there can be challenges.
Higher Risk Of Default: Traditional lenders often consider loans for vacation homes and second homes to be riskier than loans for primary residences. The thinking is that if you encounter financial difficulties, you’re more likely to default on a mortgage for your vacation home or second home than on your primary residence. To mitigate this risk, lenders may require higher credit scores, lower debt-to-income ratios, and/or larger down payments.
Higher Down Payment Requirements: For a vacation home or second home, mortgage companies typically require a larger down payment than for a primary residence. Whereas you might be able to buy a primary residence with as little as 3-5% down, lenders might require 10-20%, or more, for a second home. This higher equity requirement transfers some of the risk from the bank to you, the borrower.
Interest Rates Might Be Higher: The interest rates on mortgages for vacation homes and second homes tend to be higher than those for primary residences. The increased rate helps compensate the lender for the higher risk associated with a property.
Rental Restrictions: While many people buy vacation homes or second homes with the intent to rent them out when they’re not using them, some lenders impose restrictions on this practice. To qualify for a second home mortgage, you might be required to occupy the property for a certain portion of the year. Lenders might also require assurances that the property won’t be used primarily as a rental property, (which would categorize it as an investment property, subject to different lending standards).
Insurance: Insurance could be hard, or impossible, to get if you’re buying a vacation home or second home in an area that’s prone to natural disasters (like hurricanes, floods, or fires).
Qualifying For The Mortgage: You might be counting on rental income to help offset your costs of owning a vacation home or second home, but a traditional lender or mortgage company might not factor that income into your debt-to-income equation. Without the rental income factored in, you might not be able to qualify for the mortgage.
We Can Provide Hard Money Loans For Rentals And Non-Owner Occupied Properties
Fortunately, when traditional lenders, banks, or mortgage companies say “no,” we’re often able to say “yes.”
At TriTalent Funding Group, since 2004, we’ve been providing short-term loans for vacation homes and second homes. Our short-term loans (up to one year) range from $75,000 to $7 million, and we can loan to individuals, partnerships, LLCs, corporations, and trusts.
Other Types Of Residential Loans
In addition to providing hard money loans for vacation homes and second homes, we also provide loans for fix and flip projects, renovations and rehabs, BRRRRs, and non-owner occupied and rental properties.
For more information about a vacation home or second home loan, or to schedule a free loan consultation, please call (254) 230-0012 (for loans in Texas) or (503) 222-4466 (for loans in Oregon and other states).
Please note that we provide hard money loans throughout Texas, including: Dallas-Fort Worth, Austin, Waco, and San Antonio. We also provide hard money loans in Oregon, Washington, California, Nevada, and Arizona.