What a Second Home Loan Is
A second home loan finances a property you'll occupy part of the year — a vacation or secondary residence — as opposed to a pure rental. Second homes often qualify for terms closer to primary-residence financing than investment loans do.
Who It's For
- Buyers of vacation or seasonal homes
- Those purchasing near family or work for part-time use
- Borrowers wanting better terms than investment loans
- Buyers who'll personally use the property, not rent full-time
How It Works
Lenders distinguish a second home (you use it) from an investment property (you rent it). Second homes typically must be a reasonable distance from your primary residence and suitable for year-round use, and they generally carry more favorable terms than investment-property financing.
Frequently Asked Questions
How is a second home different from an investment property?
A second home is for your personal use part of the year; an investment property is rented out. Second homes usually get better rates and terms.
Can I rent out my second home sometimes?
Occasional rental may be allowed, but significant rental use can reclassify it as an investment property. We'll explain how lenders view this.
What down payment do second homes require?
Typically more than a primary residence but often less than an investment property. The exact amount depends on the lender and your profile.