We are hearing from the local mortgage reps who actively work in the vacation home market. The guidelines and programs have certainly changed since the fallout from high-risk loans. But, they are still lending money, and open for business.
Back in the “normal” days, loans were typically 80% of the purchase price, and buyers had to show proof of income (imagine!). The 100% loans based on stated income (often called low-doc or no-doc loans) were a risky business move and are coming back to haunt the lenders.
If you have a solid credit score, a 10% to 20% down payment, and proof of income (tax return, W-2, profit/loss statement, etc.), the interest rates and loan programs are still favorable.
Most buyers in our market opt for an interest only product. The 7/1 or 10/1 ARM’s make sense for many. There is always the option to pay down the principal if a buyer decides to stay in the property for a longer period of time. But most have plans to trade up, re-build, or re-finance by the time the 10 year locked in rate time period expires.
I have excellent contacts in the mortgage business- people I have known for years, and trust. I will be happy to pass along those names and numbers if you have questions about a current or future loan. ann@anndelaney.com