Tips for Your Second St. Louis Home Down Payment
Make Your Second St. Louis Home Down Payment With Equity From Your Primary Residence
If you are one of the St. Louis homeowners that owns your primary residence outright, with no mortgage, you are one of the lucky ones. Not only are you no longer needing to worry about making a mortgage payment, including pesky interest, but it opens up your possibilities when it comes to purchasing a second St. Louis home.
Best option for a down payment
There are programs that could be available to you for low down payment options when you are purchasing your primary St. Louis residence. When you are ready to buy a second St. Louis home or vacation home, these will not apply. Lenders want to see larger down payments made on second homes. So what is the best way to make the down payment when you already own one home?
Using the equity on the property you already own can be one of your best options. A home equity line of credit, or HELOC, generally costs less than other types of loans. It allows you to keep your hard earned cash in the bank so you can access it if emergencies are to arise.
Pay attention to the fine print because some HELOCs come with an early repayment penalty. This is typically a small number and could still make it a good option for you.
Keep cash in the bank
Having access to additional funds is important when you are a St. Louis homeowner, and even more so when you own a second St. Louis home. When a house sits empty for longer periods of time, it can be common for problems to arise. You want to make sure that you have the funds you need just in case you run into a problem that needs to be dealt with quickly.
That is not the time you want to be running out to try to obtain a mortgage or HELOC on your primary house in order to take care of the expenses at your second home.
Maintenance
Maintenance is crucial to keep a St. Louis house in working order. When the house is going to be sitting empty for extended periods of time, it is even more important. Make sure you are doing any of the maintenance that is required to stay on top of problems before they start. It is always cheaper and easier to deal with a maintenance issue than it is to take care of a house emergency.
The other side
The best argument for not taking out a HELOC or accessing any equity through your paid off house is that you then have the chance of losing your property. Even if you think there is little risk, it is still there. You want to think carefully before ever putting your residence up as collateral for a loan. If you pay the second St. Louis home’s down payment out of your bank account and leave the equity in your house alone, you know your primary residence is always safe.
Buying a second St. Louis home opens up a lot of possibilities. It could eventually become a rental property or just an amazing vacation home to build memories as a family. Before accessing the equity in your existing home, consider all your options, but it might just be your best bet.