Last week Jaime and I headed northeast with a full car of food, card games, and even the kitties for a few days away after a busy retail season. Battle Lake, Minnesota may not have a lot to offer from the outside, but it is the location of Jaime’s parents beautiful lake cabin. There have been many family gatherings there, but we enjoyed the experience of a winter wonderland weekend-get-away just the two of us this time. Chris Vinson, Executive Vice President of the Plains Commerce Bank mortgage department, helped finance this cabin and then answered a few questions for me about owning a second home. His paraphrased answers are below:
[Chris on the far left with his family at our 605 Advantage Group Holiday Party]
How is financing a second home different than financing a first?
Generally speaking, it is very similar to financing a first home. The advantage is you can use the current interest rate, which is low, instead of what you have on your first home. Other positives are that you can finance up to 90% of the home, having only 10% down. And you can use the equity from your first home, making owning a second a seamless and easier process than most people think.
[Beautiful view from the lakeside of the cabin]
What is the biggest misconception about owning a second home?
The biggest misconception of owning a vacation home is people thinking you can’t rent it out. You must occupy the home 25% of the time, but other than that, you can rent it out for a week or on the weekends when you don’t plan to be there. This can help offset the expenses of an additional home.
[Snow shoeing for the first time around Lake Clitherall]
What are the benefits of owning a second home?
A second home adds a whole new level to family vacations. You can invite extended family since you most likely have more than one bedroom like a hotel room, and you are creating a meeting place for guests from all over the country. Whether that be on a lake, in the mountains or near the beach. You are creating a home away from home since you get the benefit of leaving town and your routine, but while on this vacation you are still ‘home’. It is the best of both worlds.
[Fresh snow at the entrance to the cabin]
What advice would you give to someone on the fence about exploring a second home?
I would suggest renting in the area you are thinking about buying. Then you can get a feel if that is the right location for you. Also, talk to your current lender. Whether you are looking to buy in South Dakota, Minnesota or Arizona, they can help you with financing regardless of the state you are purchasing in.
As Chris described, owning a second home does not have to be an unattainable dream. It may be closer to reality than you think! Chris and everyone at Plains Commerce Bank are extremely knowledgable, professional and fun to work with. If you are thinking about purchasing a second home, I would highly suggest giving them a call! And when you are ready to start exploring homes, give me a call at 605.261.8396 or shoot me a message on Facebook, I would be honored to help you discover the right style and location for your family’s second home.