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Most second home purchase mortgage loans will not qualify for government programs to reduce the expense of the purchase. This means you will need to qualify for a lower interest rate on your own, based on your credit score and personal financial history. Selecting the right type of loan will ultimately save you money in financing costs over time.
Securing a loan against an asset is a great way to reduce the risk to the lender and therefore reduce the cost to a borrower. If you have sufficient equity built in your primary residence, you may opt for a home equity loan or a second mortgage. Placing collateral is risky, though, so carefully choose this option only if your income and assets can support it.
Turning your second home into an asset instead of a financial drain is essential for your long-term wealth. Try opting for a shorter loan on your second mortgage than on your primary mortgage. The higher monthly payments will mean you can get the debt off your record faster, and you will have the freedom to sell the home in the future without concern over how much money it will take to pay off the mortgage.
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