Buying a second home is something many of us dream about.  From  the ocean front condo to the lake home.

Financing that dream is rather simple to understand for most people, that being that you simply need at least 10% for down payment, and can you safely afford it.

Many vacation homes, especially lake homes tend to be shared by families, so often times their can be complicated financing options.

A common situation is that one or more parties don’t really want to be “on the mortgage”, but will be contributing to the down payment.  That is completely acceptable. It is considered a gift, and here are the rules.

On a SECOND HOME, there’s no limit on the amount of gift money that can go into a down payment. However, if the total down payment will be less than 20%, then person on the mortgage loan MUST contribute at least 5% of the down payment of their own money.

If the total down payment will be more than 20%, then the entire down payment can be a gift.

This is different than when buying a primary home. On a primary home, regardless of total down payment, it can all be a gift.

When buying an investment property. No gift of any kind is allowed.

Ready to buy that second home? Get pre-approved today with Cambria Mortgage.  It’s quick, easy, secure. We lend for primary homes, 2nd homes, and investment homes in Minnesota, Wisconsin, Iowa, North Dakota, and South Dakota.