Key takeaways
- True second homes get near-primary rates and can go as low as ~10% down.
- Planning meaningful rental income changes the correct loan to an investment/DSCR structure.
- Resort-market condos are frequently non-warrantable or condotels — check before you fall in love.
- Budget the full carry: insurance in vacation markets can be the line item that surprises you.
Every vacation-home purchase starts the same way: a great week somewhere, one wistful look at a listing site, and the thought 'what if we just... owned here?' The financing that follows is genuinely friendly — vacation homes are one of lending's better-kept secrets — but the path has three forks where buyers routinely take the wrong turn. Let me mark them.
Fork one: how you'll really use it
A true second home — you use it, family uses it, it sits otherwise — earns near-primary-residence treatment: strong rates, down payments that can start around 10%, smooth underwriting. But if the honest plan involves meaningful rental weeks, the right structure is an investment loan (often DSCR, where projected rents help you qualify). The occupancy box you tick is a legal declaration, not a pricing preference — my second-home-versus-investment guide covers the line in detail.
Fork two: the property type curveball
Vacation markets are dense with exactly the property types conventional lending declines: condos with high investor concentration (non-warrantable), buildings with front desks and rental programs (condotels), and unique cabins with no comps for miles. None are unfinanceable — they're portfolio-lender specialties — but discovering the issue at day 21 of a 30-day contract is how deposits get lost. Screen the building before you write the offer; it takes me about a day.
Fork three: the carry costs
- Insurance — coastal wind, flood zones, and wildfire ratings can make premiums a headline number, not a footnote.
- HOA dues — resort amenities are lovely and expensive.
- Management and upkeep — someone has to open, close, and watch the place; distance has a price.
- Seasonality — if renting, income concentrates in a season while costs run all year.
The playbook that works
Decide your true use honestly; get the building or property screened early; price the full annual carry, not the mortgage alone; and match the loan to the plan — second-home terms for a genuine getaway, DSCR for an income property with personal weeks. Bring me the listing before you offer, and the financing will be the easiest part of the whole dream.
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