Starting that legacy may seem daunting today, given restrictive mortgage underwriting. Fortunately, financing your Lake Michigan shoreline vacation home can be done! It takes patience and a good understanding of the process.
Mortgage underwriting will vary by lender, but there are common guidelines that apply. Understanding these tips will put you closer to owning your Lake Michigan lakefront home!
Your second home must be a reasonable distance from your primary residence, usually meaning one hour away or more. However, if your second home is located on a lakefront or has lake rights, this is an adequate substitute for the "reasonable distance" clause.
Lenders evaluate the distance and location of your second home carefully, as they must be confident that you are truly seeking a vacation home for your own use, and not an income property. Underwriting rules are strict in this respect.
The second home must be occupied by you for a portion of the year, be it seasonal use or weekend occupancy. The second home must be suitable for year-around occupancy, even if you only visit it in the summer. Three-season homes would not qualify.
Your second home cannot be used as a rental property, nor be part of a time-share.
Second homes must be single-family units. No duplexes or multi-family homes would qualify, even if you occupied a section of the property on a seasonal basis.
Each lender may have unique guidelines beyond these general rules of thumb. If you have a good relationship with a financial institution, and you've been browsing vacation homes on the Lake Michigan shoreline, why not pop the question? Knowing the requirements up front puts you closer to owning your dream home.
Whether you are looking for homes in the Chicago North Shore area, Evanston, the Indiana shoreline or Harbor Country, we're here to help you! Our Shoreline Property Advisors Team and our Prudential Rubloff Real Estate agents are dedicated professionals with a commitment to excellence. Contact us today for the best in real estate service!
Shoreline Property Advisors
@ Prudential Rubloff
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