We're looking into potentially purchasing a lake house in the coming months, and looking for any advice the all-knowing posters of TexAgs may have in this regard.

I know I can expect interest rates to be higher for a second home - does anyone have a good handle on what those rates are hovering around these days for a couple with great credit? I'm assuming 7% (hoping that lowers in the coming months)?

Anything else we should think about in the purchase of a second home? Obviously understand we won't be claiming a homestead so will be more exposed to property tax increases.

7's is a good guess, it also depends on how much down you have as well.
Insurance is higher than on your primary most likely.
If you need help with the mortgage email me
highpriorityag@gmail.com

I just went under contract for a second home yesterday. One thing I was told by every lender I talked to was the second home designation means a minimum 25% down payment. The 7% rate mentioned above is exactly what I'm seeing right now.

That is not the case as you can put down as little as 10% down for a second home if you are using a fixed rate and the loan amount is 766,550 or lower.


https://singlefamily.fanniemae.com/media/20786/display

That's interesting. I had four different lenders all tell me the same thing.

maybe it was due to debt to income ratio and that LTV can get you qualified? Not sure but if you are borrowing 766,550, Fannie/Freddie both allow up to 90% on a second home assuming you qualify. A lot of lenders have very little experience in anything other then owner occupied.

The last post linked Fannie Mae and this is Freddie Mac: https://sf.freddiemac.com/general/maximum-ltv-tltv-htltv-ratio-requirements-for-conforming-and-super-conforming-mortgages

It might be because it's a condo loan instead of SFR.

If things are down to 7%ish, I'm more likely to buy another rental property. I think our last one was 8%. I thought typically rental homes were about 1% more than personal loans. Granted I don't handle this part of the business, hubs does that. But I'm not as opposed at 7%. Putting the 20-25% down isn't an issue.

In that case, I am going to guess it is actually what is a called a "condotel". Does the project allow for rentals under 30 days?

with 25% down or more, non-owner single family properties are well under 7%. Quoted one today at 6.625%.

Good to know. Thanks for all of y'all's input! We're planning on putting down roughly a third of the purchase price so that should provide us the best rate. With plans to start looking in earnest in October, I'm hoping we do see our first rate cut in September.

Of course, then I see Pear Realty's market Update thread and am wondering if I'm about to buy at the exact wrong time as the RE market appears to be cooling. In that regard I'm wondering if lake front properties may be somewhat insulated due to location, or if they would be harder hit because most lake homes are non-homestead and expendable if the Owner is in a crunch and needs liquidity.

Jay@AgsReward.com said:

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In that case, I am going to guess it is actually what is a called a "condotel". Does the project allow for rentals under 30 days?

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No.

Then if not a condotel, you can put less then 25% down.

We bought on LBJ in December.

• Avoid properties that have been on VRBO or AirBNB. The wear and tear is not always obvious but trust me these houses have been put through the wringer.
• If you enjoy water sports vs fishing pay attention to the lake community you choose. East Texas primarily fishing and minor recreation. Lots of stumps and not constant level.
• Don't ignore the depth levels at your dock. Some of the canals (and even coves) can get shallow and deeper hull boats have trouble.
• Don't buy at the end of a canal. Stay near the entrance of cove or larger body. Too much muck and debris.
• Open water frontage is ideal but be aware of the chop which can impact your floating time and boat dock parking.
• Opt for a community that doesn't allow short term rentals. New loud and crowded neighbors each weekend will bother you over time.
• Have a good grocery store and home hardware store within 15 minutes. You will be visiting each every weekend multiple times.
• Expect to have many unexpected boat/jet ski and dock/lift related repairs. Comes with the territory.

Thanks, and good advice.

We're actually looking on Buchanan, because 1) it's not nearly as crowded as LBJ, 2) it's more affordable, 3) a lot less boat traffic and a wide open lake, and 4) I grew up on that lake. My parents, other family and friends have places there. Obviously the big drawback of Buchanan is that it's not constant level, but doesn't bother me too much.

Jay@AgsReward.com said:

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with 25% down or more, non-owner single family properties are well under 7%. Quoted one today at 6.625%.

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I'll have hubs reach out to you. I assume it's the email in your username?

It should unless you are close to the dam

Yes, I can be reached at my username.