Having a second home is becoming more and more of a necessity than a luxury. It is an idea well worth your consideration because the second home will not just be a vacation spot for you but you can also use it to yield returns. How so? Well, whenever you aren’t vacationing in it, you can always rent it out. According to statistics, the rent paid by tenants has increased by 5% nationwide in the past year. Among the people who have benefited most are homeowners with vacation rentals.
Daily Texas Mortgage Rates for 1.21.22
30 Day Range 2.5% - 3.784%
30 Day Range 2.25% - 2.966%
30 Day Range 2.5% - 3.846%
30 Day Range 2.942% - 3.57%
*Calculated from actual locked rates with consumers across more than one-third of all mortgage transactions closed nationwide
One of the best places to have your second home is Texas. Like other states in the US, a house in Texas is only considered a second home if you spend a considerable number of days in it per year. If your mortgage loan is backed by Fannie Mae or Freddie Mac you have the liberty to rent the property out for up to 180 days without it being considered as an investment property. But you will have to report the rent income to the IRS.
Down Payment / 20%
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The first thing you will need to know is financing. Unless you have all the cash required, you will have to take a second mortgage for your secondary home. That calls for very careful planning because of the associated costs. They include repaying the principal, interest, taxes, and insurance. There are also maintenance costs like repairs, furnishings, and utilities. Ideally, you need a Texas mortgage expert to do a cost-benefit analysis for your second home. The Moreira Team can help with that.
The next consideration is your eligibility. In Texas, the requirements for a second mortgage are not the same as for a first. The lender will likely ask for a down payment that is at least 20% of the loan amount. If you have a good credit score and sufficient income and assets you can qualify with 10%. Speaking of credit score, Fannie Mae and Freddie Mac loans require a FICO score of at least 620. But of course like all other loans, if you have a good real estate agent behind you, you can negotiate for less stringent requirements. For more information on how to buy a second home in Texas, contact Moreira Team and we will help you achieve your housing needs.
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