Smart Money touts in today’s article that more vacation home buyers are paying cash rather than obtaining a loan. In summary, the loan process is stricter for the second home purchase as “banks demand higher down payments and place strict limits on how much debt thse buyers can incur.” The lenders require “borrower’s home payments and other debt typically can’t surpass 36% of their pre-tax income if they want to get approved for one mortgage. Try to buy a second home with a loan, though and borrowers will need to make both home payments and other debts fit in this 36% range as well.” Also the lenders want a ” vacation home to be at least 50 miles away from the primary residence and near a resort area — like beaches, lakes or ski towns–otherwise they suspect that the individual is actually trying to buy an investment property to rent out.”
Given these requirements – it is a lot easier to purchase the second homes with cash. “With cash buyers, there’s more certainty for the seller; the sales transaction tends to happen faster and isn’t dependent on a bank coming through with a mortgage.”
If you are interested in leasing, purchasing a property or selling a property in Malibu, Pacific Palisades, Calabasas or the surrounding Beverly Hills/southern California area then please contact Judy Kunisaki for professional real estate advice in the Westside Los Angeles area, on 310-317-8396 her online contact form on her website.
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Judy Kunisaki – CA DRE license 00963582










