Four Quick Tips | Lake Martin Living

Have you ever considered buying a second home on Lake Martin? As a banker, I see a national demand for the Lake Martin area as property values continue to increase. 

Now is a great time to explore your financing options and find the perfect home. Properties have been selling fast, which means that at any moment, the dream lake house you’ve had your eye on could come on the market. While interest rates might impact your purchasing plan, it’s important to seize the opportunity when it arises. You could always refinance when better rates become available.

If you’re considering buying a second property, here are some tips to remember. 

1. Have a plan for the property.

 Are you buying this as an investment property? Or, maybe it’s a retirement getaway you hope to eventually leave to the grandkids. No matter the reason, make sure you have a clear purpose, because this can affect your financing options. If you’re buying an investment property, you’ll usually need a higher down payment and more substantial reserves. However, if you plan to rent out your second home occasionally without formal operation by a property management company, these requirements may not apply.

2. Consider the additional costs of a second home.In addition to your mortgage payment, you must budget for water, power, cable, internet services, insurance, maintenance and upkeep, among other things. If you decide to rent your property out, there may be property management fees and additional insurance requirements. Or, if you opt for a condo as a second home, keep in mind that you will likely have to pay a monthly homeowners association fee in addition to your mortgage.

3. Review your plan and purpose with a financial advisor. Each buyer is unique, and various factors such as job status, retirement status and financial reserves should all be considered when purchasing a home. Discussing these factors with a financial advisor will help you craft a plan to buy a second property. Most importantly, they’ll help you evaluate whether the investment is risky or safe for your situation. If you don’t have a financial advisor, talk with your banker, as they may connect you with a financial planner who can provide personalized advice. 

4. Engage your banker early in the process. With a thorough understanding of your financial situation, goals and plans, your banker can assist you in finding the right financing options to ensure your path to financial success. A banker can then help you get pre-approved, so you’re ready when the time comes. If you’ve been thinking about buying a second home, but you’re not sure yet, talk to your banker. You might be surprised to find out that you may already have what you need to make it happen.

You don’t have to be rich or independently wealthy to buy a second property, but you do need to have a plan, a good banker and a trusted financial advisor to make sure a second home is a feasible investment.

~  Jerry Clark is an Alabama Mortgage Sales Manager, at Valley Bank, Alexander City branch. He has been banking in the area for over 22 years. Contact at 334.744.9001 or jclark@valley.com. The Valley National Bank NMLS number is 411254 and Clark’s NMLS number is 642761.

*This article is for informational purposes only. Any views, thoughts and opinions expressed herein are solely that of the writer and do not necessarily reflect the views and opinions of Valley National Bank.