Galveston the Last Frontier of Affordable American Waterfront

Vacations homes are homes that can be occupied year round by the owner. Most times the vacation home should be at least 50 miles away from your primary residence and be in a resort location (by the beach, lakefront). Vacation homes include single-family residences, half of a duplex, and condominiums.

To get a good mortgage on a vacation home you should be aware of what obstacles you may face when purchasing. When purchasing a vacation home in Texas the maximum financing allowed by Fannie Mae and Freddie Mac is 90%. These homes usually require a 10% down payment. You may be able to find a portfolio lender who will allow for up to 95% financing. Always, always when buying a new home please get an inspection. Professional inspectors are licensed to determine the problems with a home before you buy and are worth their weight in gold. Understand that the rates on second homes are comparable to rates on primary residences. They are almost exact. Don’t be fooled by someone telling you that second homes carry a much higher interest rate. This just is not so. Compare good faith estimates from banks and local mortgage brokers.

The good news about Galveston, Texas property is that it has not seen a steep drop in prices or has yet to deal with declining value. There are nice beachfront homes for less than five hundred fifty thousand dollars. Compared to California or Florida real estate although not cheap is far less expensive. Also seek the expert opinion of a seasoned real estate agent who will be able to give you some background on the homes that you are interested in. We are in a buyers market and many homes are available.

Here is a series of considerations for determining what mortgage lender to use.

1)Check references.

2)Look for testimonials.

3)Get expert advice.

4)Do not pay application fees.

5)Do not borrow more than you can pay back.

6)Find out how long the loan officer has been in business. Have they furthered their education by taking fraud prevention courses?

7)Deal with someone local to the area you are buying in. It is easier to resolve problems with someone you can meet face-to-face vs. talking with someone in another state.

8)Make sure that they are telling you how much they are making on the loan. Make sure they discuss how they are paid. If they are a broker they will have to disclose closing costs and yield spread premium.

9)Find out if they are licensed. Mortgage brokers and loan officers that work for mortgage brokers require a license. Mortgage bankers that work for banks or credit unions do not require a license.

10)Find out what percentage of clients are from repeat/referral business. This will give you a good idea on who you are dealing with. See if they will give you the name and number of a closed client.

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