Having a second residence can be treated as a luxury but considering the costs that you may incur during your vacation trips while renting hotels and vacation houses every year, it might just be worth spending some money for a second home. Somewhere at the countryside or a coastal area will be a nice change compared to the busy streets and tall buildings of the main cities in the United States. If your budget cannot afford buying another house outright, you can get a summer home mortgage instead.

Most financial institutions regard the second residence the same way the treat mortgage plans for primary residences. However, since the nature of the mortgage is a bit riskier than the first, financial institutions implement higher rates if they do take on the second mortgage. They are more cautious at providing a second mortgage for a summer home due to the financial credit crunch of the borrowers that is why they even require bigger down payments. Some organizations will endorse your home mortgage disregarding your bad credit score, but that comes with major repercussions. Be ready to pay higher fees and interest that can be two to three times the average rate. Beware of scams and other schemes of some lending companies. It is always best to consult a trusted real estate agent or broker.

Before you ink the contract for a second house, consider the advantages and disadvantages of having another house or a summer home mortgage. How will this affect your finances? Do you make a mortgage through a bank, a credit union or other lending companies? Most of the buyers of second homes are well-off but some families are also encourage to buy summer houses in order to escape from the city buzz and ultimately hope for lesser expenses on accommodations and more flexibility during vacations.

Undeniably, because of the economic recession, there are considerable melt downs of lending companies, and some of the real estates particularly second homes in Florida and Phoenix have experienced these effects. You will need financial counseling before sealing any deals. You cannot blame the lenders because there are a lot of people defaulting on payments. You need to prove to these lenders that you have a continuous and decent cash flow to sustain the mortgage. You can actually think of renting out the second home in order to make sure that there will be a steady cash flow for paying the mortgage but this idea has different effects on lending companies so you better have a clear plan on how to attack the mortgage details.

Deciding on getting a summer home mortgage is a whole different deal from getting a home loan approved. Having a higher credit rating can definitely help you get it. Approximating your expenses will not be advisable; you have to lay down everything on paper including expenses on repairs, brokers' fees, utilities and taxes. If you add these all up, you may find yourself re-thinking the whole idea. Buying a second home out of the urban area is so tempting. So reconsider before making another commitment and regretting it after

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