Because of economic conditions, the qualifications for buying a second home have changed tremendously. What used to be easy has become much more difficult, especially for homeowners who are looking for a second home to use as an investment. It is actually easier to purchase a vacation home than a home for renting or flipping.
Pittsfield, MA -- (SBWIRE) -- 07/15/2013 -- At one time buying a second home with no money down was easy to accomplish. However, since the crash of the housing market things have changed. Sellers have become less willing to help potential homeowners, and lenders are no longer as willing to provide piggybank loans. Before the downturn in the housing market creative financing was at its peak—it was a buyer’s market with sellers willing to bend over backwards to sell a property. All of the options had advantages and disadvantages.
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The most popular way to finance when buying a second was a piggyback loan. Loans with private mortgage insurance were next with seller financing becoming popular as well. Learning how to purchase a second home with no money down has become more of a “science” in today’s market because of the differences the depressed market has caused.
Have you ever given a thought to how to buy a second home with no money down? There are several methods that work very well and are actually quite feasible. Some of the more common ways to buy a second home that don’t require down payments include:
- Mortgage with private mortgage insurance (PMI)
- VA (may or may not pertain to the purchase of second homes in which the homeowner doesn’t live)
- House trading
- Lease with the option to buy
- Piggyback loans
- Seller financing
Seller financing has made changes over the years as well. It is rare to find 100% seller financing in today’s market. Typically seller financing involves the seller taking back a second mortgage for the down payment on the property or any lesser amount the bank will not finance. These notes usually have very high interest rates.
Usually the best option for those who don’t have the money for a down payment is a lease option where the seller puts aside a certain portion of the rent proceeds toward the down payment when the lessee buys the property at an agreed upon later date.
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www.real-estate-yogi.com an online marketing service located in Pittsfield, Massachusetts reminds consumers if a deal seems too good to be true, it usually is, so use some common sense and avoid scams.