Buying a second home? Here are 5 tips to consider


A second home can be a great escape as well as a good investment. But there are certain things you should know if you are looking to buy a second home. Lenders take on more risk when providing loans for second homes and their requirements can be a little more stringent than you might remember from your first home.

Here are the 5 things to keep in mind when preparing to buy another home:

Job Stability

Lenders will want to see that you have job stability. Job hopping or a recent change in career path can be a red flag when getting a mortgage. A lender will typically want to see a minimum of two years in the same industry; however, exceptions may be made so check with your lender.


Make sure you’ve got a clean bill of health when it comes to your credit. While a lender will pay close attention to all of your credit history, your mortgage payment history is particularly important. Also, when properly managing credit, you should know your credit rights, understand how to read your report and how to best balance your credit accounts.

Credit fact: You can pull your own credit every day until the end of time and it will not impact your credit score.


When purchasing a second home, your lender will want to see that you have a reasonable amount of reserves in your account(s), usually two months’ worth. Reserves are the total monthly payment for your mortgage – this includes taxes, insurance and any home owner’s fees.

Down Payment

Minimum down payment requirements for second homes are usually higher than those for primary homes. For a conventional loan, the minimum down payment on a second home is usually about 10 percent, while the minimum for a jumbo loan will often require 20 percent down or more, depending on the lending requirements.

You’ll want to be sure you have enough savings to cover the down payment, closing costs, the reserve requirements and other costs and fees associated with a home loan purchase.

Home Location

While there is no hard and fast rule on how far your second home is from your primary residence, your lender will look at this and require that it is a “reasonable distance” from your primary residence. They are essentially trying to determine that this is, in fact, a second home and not an investment property. Reasonable distance really is just a common sense gut check.

For example, if the home you’re trying to purchase is only a few miles from your primary residence, and is not located in a vacation home area, it’s unlikely to be considered a second home. However, if you live in the suburbs and are buying a condo in the city, that would likely be considered a second home.

Taking these 5 tips into account helps to make the process much smoother so you can focus on all of the fun you’re going to have in your new second home.

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