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Current second home mortgage rates
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The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where and in what order products appear. This table does not include all companies or all available products. Bankrate does not endorse or recommend any companies. Zach Wichter is a former mortgage reporter at Bankrate. He previously worked on the Business desk at The New York Times where he won a Loeb Award for breaking news, and covered aviation for The Points Guy. At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for . ON THIS PAGE Important information about our rate table The above mortgage loan information is provided to, or obtained by, Bankrate. Some lenders provide their mortgage loan terms to Bankrate for advertising purposes and Bankrate receives compensation from those advertisers (our "Advertisers"). Other lenders' terms are gathered by Bankrate through its own research of available mortgage loan terms and that information is displayed in our rate table for applicable criteria. In the above table, an Advertiser listing can be identified and distinguished from other listings because it includes a "Next" button that can be used to click-through to the Advertiser's own website or a phone number for the Advertiser. Each Advertiser is responsible for the accuracy and availability of its own advertised terms. Bankrate cannot guaranty the accuracy or availability of any loan term shown above. However, Bankrate attempts to verify the accuracy and availability of the advertised terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. Advertisers may have different loan terms on their own website from those advertised through Bankrate.com. To receive the Bankrate.com rate, you must identify yourself to the Advertiser as a Bankrate.com customer. This will typically be done by phone so you should look for the Advertisers phone number when you click-through to their website. In addition, credit unions may require membership. If you are seeking a loan for more than $548,250, lenders in certain locations may be able to provide terms that are different from those shown in the table above. You should confirm your terms with the lender for your requested loan amount. The loan terms (APR and Payment examples) shown above do not include amounts for taxes or insurance premiums. Your monthly payment amount will be greater if taxes and insurance premiums are included. If you have used Bankrate.com and have not received the advertised loan terms or otherwise been dissatisfied with your experience with any Advertiser, we want to hear from you. Please to provide your comments to Bankrate Quality Control. What are the differences between mortgages for a primary residence and a second home
A second home mortgage helps pay for a or . Unlike the mortgage for a primary residence - where you live most of the time - a second home mortgage typically requires a larger minimum down payment and has a slightly higher interest rate, and can have stricter requirements when it comes to cash reserves and debt-to-income (DTI) ratio. A mortgage for a primary residence, for instance, might only require 3 percent or 5 percent down, while a second home mortgage might require at least 10 percent. In addition to that, you'll likely need two to six months' of reserves, depending on your credit and financial profile, to ensure you're able to cover mortgage payments on both your primary residence and second home. Your , meanwhile - which helps determine your ability to repay the loan - might max out at 43 percent, although some lenders cap it at 36 percent. On primary residences, there's usually flexibility up to 50 percent. How do second home mortgage rates differ from rates for a primary residence
Mortgage rates are somewhat higher on second home mortgages - by as much as 0.5 percent, 0.75 percent or 1 percent more. This is in part to compensate for the risk of a second home, which you're much more likely to walk away from if you weren't able to make payments compared to your primary residence. Pros and cons of a second home mortgage
Pros
You can deduct the interest and property taxes – You can deduct the mortgage interest for both your primary residence and second home up to $750,000 total (or $375,000 if married filing separately). This applies only to "qualified" second homes, meaning you don't rent it out, or you do rent it out but also use it yourself for a certain period of time each year. You can also deduct combined property taxes up to $10,000. You can use your primary residence to help pay for it – You can take advantage of the equity in your primary residence to make a down payment on a second home, either through a or . Cons
It costs more – You'll have a higher mortgage rate for your second home loan, so you'll pay more in interest. You'll also have a higher rate if you decide to down the line. Along with that, you'll need to make a bigger down payment. It can be harder to qualify for – Because the home isn't your primary residence, you'll need to meet stricter credit, DTI ratio and reserve requirements. How to qualify for a mortgage on a second home
Your second home has to be used as a second home in order to qualify for a second home mortgage - it can't be an . Similar to the mortgage on your primary residence, your credit, income, employment history and other factors need to meet requirements. As early in the process as possible, review your credit report to check for errors or ways to improve your score. If you can, work on paying down debt - this can help you qualify for the mortgage, and also boost your credit. Organize your paperwork, too, including pay stubs, tax returns and bank statements. Depending on where your second home is located, your lender might also require flood insurance to qualify. Can you refinance a second home mortgage
You can refinance a second home mortgage, but as with any refinance, it's crucial to ensure the savings outweigh the closing costs. Because interest rates are higher on a second home mortgage, it can take you longer to recoup these costs. You might also need more equity in your second home in order to refinance and, as with the initial loan, sufficient cash reserves. Learn more about second homes
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