How much do I need for a down payment on a second home?The down payment for a first home can be as low as 0% and as high as 20%. But you should expect to need at least 10% down for your second home, and sometimes more than 20%. The amount you’ll need for a down payment for a second home depends on several factors, including your credit score, your debt-to-income ratio (DTI), and the cost and type of property you’re purchasing. Down payments and interest rates can also vary depending on the lender, so it’s a good idea to shop around. Here is a closer look at how these factors can affect your down payment:
- Credit score: The higher your credit score, the less money lenders will require for a down payment on a second home.
- Debt-to-income ratio: A lower DTI can often mean a lower down payment for your second home.
- Type of property: A second home classified as an investment property will require a higher down payment than one classified as a vacation home.
- Cost of property: Financing a less expensive property is a lower risk for a lender, so it will require less money down.
- Interest rate: The more money you’re able to put down on your second home, the lower your interest rate will be.