Buy A Vacation Home
Considering purchasing a vacation home?
Let us help you plan for what's ahead so you have the information you need to make informed decisions about your home options.
- Rental opportunity. If your home is in a popular vacation spot, you may be able to rent it and earn additional income when you're not using it.
- Ongoing income and cash flow. If you choose to rent your vacation home, it could provide ongoing income to offset your expenses, and may provide tax benefits in the form of depreciation expense. Restrictions apply. (Consult your tax advisor regarding the deductibility of depreciation expense.)
- Potential tax benefits. Mortgage and home equity interest payments and property taxes may offer the opportunity for tax advantages. (Consult your tax advisor regarding the deductibility of interest.)
- Potential property appreciation. A vacation home may be a good long-term asset to hold as homes can increase in value.
Additional financial responsibilities
If you purchase a home that needs renovation, finance and renovate with ease
Is owning a vacation home less expensive than hotel stays or renting?
- If you have sufficient equity in your current home, you may be able to purchase your vacation home outright and avoid an additional first mortgage by getting a home equity loan or line of credit.
- The average time varies, but generally a home equity loan or line of credit can close within 20 to 45 business days.
Using a home equity loan or line of credit from Wells Fargo may be an option that helps you reduce your costs:
- You can use your current home's equity to make a down payment of 20% and avoid paying private mortgage insurance on your new property.
- By leveraging home equity, you may be able to contribute a larger down payment and lower the monthly mortgage payment on your vacation property.
- Our home equity financing allows you to select the closing cost option that meets your needs.1
- The interest on home-equity financing may be tax deductible. (Consult your tax advisor on the deductibility of interest.)
Learn more about establishing and improving your credit
- Do you pay your bills, loans, credit cards and other debts on time?
- We examine your payment habits before deciding to loan you money.
- Your credit history and credit score are also examined prior to deciding to loan you money.
- It's a good idea to check your credit history and correct any problems before applying.
- Do you have enough funds for a down payment and closing costs?
- You may use funds from a savings account, certificate of deposit (CD), investments, and retirement fund.
- In some cases, you may be able to use gift funds toward closing costs and all or part of the down payment.
- In many cases you will also have to demonstrate that you have additional funds in your accounts to cover several months of mortgage, tax, and insurance payments.
- What is the market value of the property you want to purchase?
- We will order a property appraisal to make sure your property's value meets our underwriting requirements.
Even if you fall within the 28%/36% rules of thumb, make certain that you feel comfortable making your monthly mortgage, insurance and tax payments and the payments on all your other monthly obligations. Homes have other costs — such as utilities, maintenance and repairs — that may not exist if you rent.
Your monthly mortgage payment is typically made up of four parts:
- Principal is the amount of money you borrowed.
- Interest is the cost of borrowing the money.
- Taxes are the property taxes charged by your local government. Typically we collect a portion of these taxes in every mortgage payment and hold the funds in an escrow account for tax payments made on your behalf as they become due.
- Insurance refers to homeowners or hazard insurance that provides protection against property damage due to wind, fire or other risks. Like taxes, insurance costs are typically collected and paid from an escrow account.
Depending upon your property location, property type and loan amount, you may incur other monthly or annual expenses such as mortgage insurance, flood insurance, and homeowners association fees.
Creating a financial plan
Estimating what you can spend
Setting a time frame
We offer different ways to estimate how much you may be able to borrow. When you know how much you expect to borrow, you can estimate a price range before you begin looking for a home.
Buying a vacation house?
Estimate how much you may be able to borrow.
- You can identify and address possible qualification problems early in the homebuying process.
- Obtaining a PrioirtyBuyer® preapproval tells real estate agents and home sellers that you have been preapproved for a specific mortgage amount.3 Real estate agents and sellers increasingly rely on preapproval to identify serious offers.
- Provides an advantage over buyers who are not preapproved.
- Adds to your negotiating strength when you are ready to make an offer on a home.
- Lets you shop confidently because you know how much you may be able to borrow.
- May allow for a faster closing, since much of the loan work is already completed.
- Without a record of previous mortgage payments, a preapproval can help you feel much more confident pursuing your first home purchase.
- A preapproval shows the seller that a lender has already run the numbers and is willing to proceed with the mortgage.
- If you're still in the early stages of house-hunting and want to know roughly about how much home you can buy, request a free mortgage prequalification.2
- If you're ready to move forward, line up your financing ahead of time with a PriorityBuyer® preapproval, which requires a credit check and a completed mortgage application.3
- Work with us online, over the phone, or in person with your local consultant.
Needs and wants
Types of homes
Professional assistance and representation
Put your offer in writing
Have your preapproval for maximum leverage
Submit a deposit
Finalize your purchase contract
- Learn about your loan options. We'll help you find a mortgage that meets you needs from our wide array of mortgage products.
- Get ready to apply. Find out what information you'll need to provide when you apply for a mortgage.
- After your application is submitted. Learn how you can track your application status online.
Brent D. Miller
Home Mortgage Consultant
NMLSR ID 404017
Toll Free: 1-800-643-0528 Ext.8638
10900 NE 8TH ST Suite 1430
Bellevue, WA 98004
Bank Closing Costs
Depending on your state, you may be responsible for mortgage taxes, attorney fees and other third-party fees.
Total the amount of your savings
- savings and money market accounts
- stocks and bonds
- certificates of deposit
Closing cost option
Have us pay your closing costs
- You pay a higher interest rate to cover all required third party costs
- This option is not available for lot loans or financing greater than $500,000
- You pay a lower interest rate
- Pay with your loan proceeds, line of credit, or a check
For details, please call us.