Homebuyers who want a brand-new vacation home review their options according to where they want to build. A vacation home can be located anywhere the buyer wants, and a new construction gives them the freedom to pick any home designs the buyer wants. Reviewing how to buy a new vacation home prepares buyers for the road ahead.
Get a Preapproval from a Lender
Getting a preapproval from a lender helps the buyer find out how much funding is available to them for buying the vacation home. Typically, buying a vacation home requires the buyer to get a second mortgage. The requirements for a second mortgage will include a higher than average down payment, and the buyer must have a qualifying credit score for their preferred mortgage home loan.
Select a Location for the Vacation Home
Selecting a location for the vacation home could increase the cost of the property. A real estate agent can help the buyer review properties in the preferred area that are priced within their budget. Knowing the highest loan amount available to the borrower helps the agent and the buyer arrive at a budget and use it to evaluate potential vacation homes. The buyer reviews all amenities available with each property and determines if the vacation home meets their needs. The location of the property can also increase insurance costs if the property is in a designated flood zone. Under the circumstances, the buyer must purchase flood insurance in addition to homeowner’s insurance.
Choose a Lot for the Property
When buying a new construction vacation home, the homebuyer must choose a lot within the community for their new property. With vacation homes, the buyers have the option to purchase a residential property or a condo. The buyer reviews the location of the lot and determines how much privacy they have and if it is the ideal choice for their vacation home. When seeking financing, the lender provides funding to buy the lot first. With new developments, the developer has installed all utilities for the lots and the buyer won’t face additional costs for these installations.
Choose a Floor Plan for the Vacation Home
Choosing a floor plan for the vacation home helps the buyer find the best design for their vacation home. If the property is a condo, the buyer will face some restrictions and will have to choose a floor plan from a limited number of home designs.
Prepare for the Closing
Preparing for the closing requires the homebuyer to purchase the required insurance according to the mortgage documents. The buyer will pay the closing costs according to the terms of the sales contract. An attorney reviews all documents for the mortgage and the transfer of ownership to the buyer.
Homebuyers who want to buy a new vacation home start by picking a location and a home design. For buyers with an unlimited budget, the sky really is the limit for their new vacation property. Homebuyers who want to buy a vacation home learn more about the process when you visit NRIA now.