getting a second home loan: what to expect

How it differs from your first mortgage

A second-home mortgage often carries a higher rate and stricter math. Lenders price in extra risk, so they want lower loan-to-value, more cash reserves, and clean payment history on your current home. Occupancy matters: a true second home is for your use, while an investment property is primarily rented, and guidelines and rates differ.

What lenders look for

Underwriting centers on capacity, credit, and collateral. Expect deeper documentation and scrutiny of all housing costs, including taxes, insurance, HOA dues, and any rental plans.

• Credit: Scores of 700+ earn better pricing; blemishes need explanations.
• Debt-to-income: Many aim for 43% or less, counting both mortgages.
• Reserves: Two to twelve months of payments for both homes is common.
• Down payment: 10–25% is typical; PMI may apply above 80% LTV.
• Income/occupancy: Document leases if using rent; follow second-home rules.

Practical tips

Shop several lenders, lock when comfortable, and build a cushion for upkeep and vacancies. Consider a HELOC on your first home, and confirm local rental and insurance requirements before you commit.

1. Request written loan estimates to compare fees.
2. Pay down revolving balances to boost your score.
3. Keep funds seasoned and avoid new debts before closing.