Guide to Investing in a Second Home in Utah
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Investing in a second home in Utah is a dream for many people. In the US, demand for second homes surged by 50% in 2020 alone. If you’re planning to buy a second home as a vacation home, an investment property, or a little of both, American Loans and Mortgages has four points for you to consider before you start shopping.
Affordability
With the downturn in the US market, there are phenomenal deals if you’re looking at the right market.
Then, there’s the second home mortgage. Unless your primary residence is owned free and clear, getting a mortgage for a second home can be challenging. Lenders may impose higher rates and ask for a larger down payment when you have two mortgages. And, don’t forget about closing costs and ongoing expenses like property taxes and ongoing maintenance.
Location, Location, Location
Location is another important consideration. Vacation homes should be in a location that provides a change in atmosphere, but close enough to make traveling convenient. Think about the accessibility of the area, the neighborhood, proximity to attractions, and opportunities for renting out the property. Having a local real estate agent who works with other second-home buyers could be an invaluable asset when you’re looking for the right property.
Insurance
Insuring your second home is a must, especially if you spend little time on the property. You can’t put your second home under the same policy as your primary residence, but some coverage may extend to the second home.
Second homes can be riskier for insurance companies, as unoccupied properties are prone to fire hazards and burglary. Premiums tend to be higher, and in some cases, coverage extends only to specific events. Don’t be surprised if the additional coverage you need for peace of mind costs more than the policy on your first home.
Enjoy It
Whether you’re planning to rent out your second home seasonally, use it as a vacation home for the family, or use it as an investment property for the foreseeable future, the best part about buying a second home is getting to enjoy the fruits of your labor.
Buying a second home comes with various perks — free accommodations on your vacation, a possible source of supplementary income, and another real estate asset to add to your portfolio. But don’t forget to consider the costs. Not only will you pay for two mortgages if the first one hasn’t been cleared out yet, there’s also insurance, maintenance, and property taxes to consider.
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If you’re interested in purchasing a second home in Utah, American Loans and Mortgages can help you get approved for a second home mortgage and make that dream come true.