- Upgrading or Downsizing
- Vacation Home or Investment Property
- Tips for Buying Your Next Home
- Loan Options
BBVA Compass offers home loans to purchase a second or vacation home. There are many options available based on down payment amount and type of property
Upgrading or Downsizing
When change occurs you may need to consider buying a home that fits your new lifestyle.
If you’re dreaming about vacation or investment home near your favorite location, you’ve come to the right place for financing information and tips.
Vacation Home or Investment Property
Looking to purchase an investment property or vacation home? BBVA Compass can show you how to apply for mortgage or home equity financing.
Tips for Buying Your Next Home
Make buying your home a good experience. Know what to expect and plan ahead.
What loan options are available for you? We have second home mortgages and a range of financing solutions to help your achieve your goal.
Upgrading or Downsizing
Moving on up or along in life?
Downsizing to a smaller home can be the right option in many cases–financially and for your lifestyle. BBVA Compass provides you with the tools you need to ensure you are armed with confidence in this decision. Or perhaps you are considering a renovation effort?
We work closely with our financial planning partners to determine the appropriate loan is in place that will benefit you. If you are thinking about downsizing or upgrading, our mortgage specialists are here to help. Call us at 1.888.8. LENDING
Moving out of state or out of the country?
When a career move means moving to a new home, BBVA Compass has the home financing information, options, tools, and resources you need to help you relocate quickly and efficiently.
Vacation Home or Investment Property
Looking to buy your home away from home?
If you're buying a vacation home or investment property, you already have valuable home buying experience from the home you live in. However, there are different considerations when you’re looking to buy a second home, and BBVA Compass can help make you an informed second-home buyer with a strong game plan.
Tips for Buying Your Next Home
Your next home is calling.
We’re here with you when you’re ready to buy your next home. Let BBVA Compass help you understand your options and considerations so you can make informed home-buying decisions.
It's a good idea to meet with a lender and get pre-qualified1 before you start the process of buying a second home, because you'll likely find that the standards for qualifying for a second home are higher than those for your primary home. Your credit score, current equity in your primary residence and other factors may determine the loan amount you qualify for, which in turn, can influence the vacation home you can afford.
Your credit will be evaluated when you purchase your second home, just as it was when you purchased your current home. Also, when considering your debt-to-income ratio lenders often want your debt to be no more than 36% of your monthly pre-tax income; and you’ll have to accommodate both home payments within this percentage. If you can’t afford the mortgage payments for both your primary and secondary home (plus taxes and insurance, etc.) and keep within that 36% ratio, you may want to consider a lower loan amount or reducing your debt.
You'll find that many lenders require a minimum of at least 15% down payment for a second home purchase—and some ask for as much as 25%. And interest rates for vacation properties are usually higher than rates for primary residences. These higher down payments and interest rates provide additional security to lenders, as the mortgage on a second property could be one of the first bills a homeowner in financial difficulty would stop paying.
If your loan-to-value ratio is higher than 80%, you may also have to be approved for and pay private mortgage insurance as an extra cost.
1 Pre-qualification is neither pre-approval nor a commitment to lend; you must submit additional information for review and approval.
Managing Your Expenses
In addition to the monthly home payment that comfortably fits your budget, be sure to factor in all the costs—including homeowner’s insurance, property taxes, utilities and maintenance on the property. If your second home is a condo, maintenance and upkeep may be taken care of by the homeowner’s association, but in exchange, you'll be required to pay for homeowner’s association dues as part of your total monthly home payment.
Whether you're purchasing an investment property, buying a vacation home or both, taking on a second mortgage will change your financial picture. The approval process is designed to help ensure your loan is one that you can comfortably afford for years to come.
Analyze the Numbers
Before you start your home search, identifying what you can afford is the first order of business. By using payment and affordability calculators, you can determine what you can afford and what your monthly mortgage payments will be. Analyze the numbers and you’ll have a good sense of what homes are within your price range.
Finding your home – most home shoppers work with a real estate agent to help them find a home. Before setting foot in a realtor’s office, consider going online to look at home listings, house styles, FSBO sites, foreclosures, and what local builders have to offer. You can expedite the home shopping process by understanding the type of home you want, prices, and location.
Making the Offer
The offer you make on a home will be based on a number of factors. If it is a buyer’s market than your negotiation strength will be good. Conversely, in a seller’s market you may have to go up against other buyers who may be willing to drive up their bid in order to win the home. Check neighborhood housing comparables (comps) to make sure that your offer matches local home values. Check the contract to learn exactly what you are buying, i.e. kitchen appliances, security system, above ground pool, etc. Included extras such as draperies, lawn furniture or a shed can sweeten the deal.
Besides your monthly mortgage payment, escrow costs which include property tax and homeowners insurance, must be factored in. Private mortgage insurance (PMI) may be required by your lender if your down payment is less than 20% of the home’s price.
Qualify for Financing
There are four factors a lender will look at when considering your loan application: the home appraisal, your credit rating, and your ability to pay back the loan. Once you are qualified, the type of loan you choose (adjustable, fixed, balloon, etc.) will determine your monthly payments and costs.
Closing and Settlement
A home inspection and final walk through will ensure that the home you are purchasing is delivered to you in an acceptable condition. Closing costs must be factored in when buying a home amounting to an additional $3-5,000 or more on top of your purchase price.
Whether you move your furnishings yourself or use the services of a moving company, you’ll want to time the connection of your utilities to take place as close as possible to your move in date. Gas, electric, water, phone and cable are some of the services you will want to have working when you move in. Notifying the post office of your address change, voter’s registration, and finding local services are other tasks you will want to handle as soon as possible.
Thinking about buying your second home? We’ll help you understand your financing choices so you can make informed decisions about your second home loan. Let’s walk through a few basic types of these mortgages.
Fixed Rate Mortgages
A BBVA Compass fixed rate mortgage can offer safety, security and peace of mind that keep your monthly principle and interest payments the same throughout the term of the loan.
Adjustable Rate Mortgages
Adjustable-rate mortgages (ARM) are initially more affordable than fixed rate loans. And they can be a good deal if you know you're going to stay in your home for a relatively short period of time. But you run the very real risk that interest rates could rise sharply and drive up your monthly payments.
Government Loan Programs
Government loan programs also can make buying your first home a little easier. These programs can offer options such as low down payments, low closing costs, and easier qualification.
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If you’re shopping for a new home, a real estate owned (REO) or foreclosed property could provide opportunities for homeownership while helping to support communities impacted by recent foreclosures.
Loans subject to program eligibility, collateral, underwriting and approval, including credit approval.
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