Written by Robert H. Ruth


Second home season is officially here!  While buying a primary residence is a substantial commitment financially, with long ranging impacts, purchasing a second / vacation home is an even larger commitment, so careful deliberate planning is paramount if you are in the market to purchase a second home this year.   Here are five important issues to consider when contemplating a second home purchase:


How familiar are you with the area?

  • Buying a home as an annual vacation destination or to use on weekends or Holidays is a very serious commitment. You better make sure you like the area you are purchasing in because you’ll be spending a huge amount of your free time there. Many buyers I work with have already spent several vacations in the region they are considering buying in before they make the decision to purchase. This is a wise decision because if you have visited an area previously you are more familiar with the area, and you have a better idea about what it might be like to live there.  You also have a greater feel for what the local customs are, what the residents of the town are like, whether there are decent medical facilities available, and if the community is safe on a year round basis.

Know what the closing costs and financing options are in advance

  • In some ways, purchasing a second home is like being a first time buyer, because it is a new experience for the buyers and they are stretching a bit financially to make this happen. You may have bought several homes in your local area, but if you are buying in another state, or several hundred miles away from home, you may find things work differently than you are accustomed to.  Closing costs on the coasts are typically higher than in the middle of the country, so that can be a shock to vacation home buyers. Property taxes are also typically higher than expected, so it is a good idea to work with a lender well in advance of looking to make sure you understand the costs involved and have the financial resources available to meet them.  Most lenders offer both fixed rates and adjustable rate options for 2nd home buyers, so you should be able to find the financing that best meets your individual needs well in advance of signing a sales contract.

Have a plan for maintaining the house in the offseason

  • This is extremely important, especially in New England or in areas where you will not be using the home much in the winter.  Weather near the ocean can have a significant impact on a property during the winter months, as can the impact of salt air, strong coastal winds, or Nor’easters which impact this region frequently. The weight on a roof from heavy snow sitting on a house for an extended period of time can lead to the formation of ice dams which can cause significant water damage to a property. You also need to decide whether to shut the house down completely for the winter and drain all the pipes so they do not freeze over. It might be a prudent idea to hire a property management company to watch the house in your absence, or have a friendly neighbor keep an eye on the house.

Anticipate and plan for hidden expenses

  • Remember, when you own a home you have to budget for the cost of cable, electricity, heat, trash collection, insurance, real estate taxes, etc. Your neighborhood may have an extra fee each year that it charges owners that you are unaware of.  All these items add up and can create financial problems. So try your very best to identify all these in advance and have a method to pay for these as they come due.

    One of the most frequent issues I see with 2nd home buyers is they have their mortgage statement, tax bills, insurance bill, etc. mailed to the vacation home rather than their primary residence. This can cause many problems, from late fees due to not making payments on time, interruption of essential services on the property, and a negative impact on their credit report. I advise most 2nd home buyers to set up automatic payments and escrow accounts to pay the taxes and insurance on their vacation home. That way they have all that in place and it is done automatically every month.

Get Pre-Approved for the Financing Before You Look for 2nd Homes

  • This, in my experience, is the very best strategy for a 2nd home buyer. If you are pre-approved, everything is in place for you to successfully close on a purchase.

    • You will have chosen a lender you are comfortable working with,

    • you know all the costs for the transaction,

    • you have provided all the supporting documentation for the bank ( paystubs, W-2 forms, bank statements, etc.) and, most importantly…

    • the Bank’s Underwriter has approved your transaction.  

    • Once you identify the house you are purchasing, all that is needed in order to close is to get the appraisal and the title search completed by an attorney, and schedule the closing. If you are Pre-Approved for the financing, you will close in less time, and be able to enjoy your vacation home this Summer.

To put yourself in the best position to buy a 2nd home contact me:

Robert H. Ruth
Senior Mortgage Banker
Direct: 401.789.4441
Mobile: 401.743.4364
Email: rhr11@icloud.com
NMLS ID: 513243


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