Having that special getaway to relax and enjoy time with friends and family without the trouble of booking a hotel is great, especially in Oregon. The state of Oregon has a lot to offer. During winter, central and eastern Oregon become an outdoor adventurer’s delight with skiing, snowshoeing, hiking, and more. And western Oregon continues to provide a temperate climate for those looking for a not so harsh winter. Read on to learn more about what you need to know before purchasing a winter vacation home in Oregon.
Understanding your financial picture
Before shopping for your Oregon vacation home, take a look at your current financial picture and determine if a possible second mortgage could be realistic for you. When applying for financing on your winter home, underwriters are looking at whether you can afford the monthly mortgage payment, interest rate, and principal, not necessarily sustaining your same lifestyle while maintaining two households.
Decide what you want to get out of your Oregon vacation home
When beginning the vacation home purchasing process, first think about what you want out of the home, about how long you plan to own it, and what all will happen in that timeframe. This can help you decide on the size and purpose of the winter adventure getaway that would be ideal for you. Do you plan on renting out the home while you’re not visiting it? Will the house be used solely for you and your family and friends’ vacationing? Or maybe this new vacation home will turn into your primary residence once you retire. Either way, it’s best to outline a game plan when making such a significant investment. Determining whether you will be renting out the home or not will make a difference in your home financing and your taxes.
Choosing a location for your Oregon vacation home
Oregon isn’t just Portland. While Portland has many attractions including its many gardens and culinary scene, there are a variety of Oregon locations to choose from with the activities that you enjoy. For instance, if skiing is your thing, Oregon has a lot to offer. There are multiple ski areas around Mount Hood, Mount Bachelor near Bend, and more resorts to the south and east of Oregon. If you’re in for more Nordic activities there is also lots to do around Crater Lake and the Willamette Valley.
If you had a cozy coastal cabin in mind for your Oregon getaway, then you’re in luck. Oregon has over 360 miles of coastline and many beach cities like Newport or Gearhart offering a quiet getaway during the winter. Western Oregon’s temperate climate also allows for outdoor activities such as golfing or whale watching.
While purchasing a vacation home will save you hotel costs and the stress of planning other trips, you’ll want to make sure that you choose a location that will still be fun and exciting for you years down the road.
Saving for a down payment
Typically, the minimum down payment needed to purchase a home is 3.5% of the home’s purchase price. However, when it comes to purchasing your second home that’s not the case. When buying a second home you will need more than 10% of the home’s purchase price to use for your down payment and in some cases 20% because lenders are less willing to let the borrower pay mortgage insurance on a second home. Besides saving for a down payment, you may have options using your current mortgage to find the cash to use for your down payment. For instance, you may be able to use a Home Equity Line of Credit or HELOC to take advantage of the equity that has built up in your home. You may also be able to use a cash-out refinance of our current mortgage to free up cash to use on your vacation home.
Financing for your second home in Oregon has different guidelines than for a first home
Financing your second home has stricter guidelines than the guidelines for purchasing your first home. Not only does home financing for a second home requires a larger down payment, but some lenders may also require you to have so much in cash reserves in order to continue making your mortgage payments in case your financial situation changes. With a second home, you are most likely going to pay a higher interest rate as well. An experienced Loan Officer can tell you about Oregon mortgage rates or get an instant rate quote. The number of loan programs that you are able to use for a second home is slightly different as well. Vacation homes aren’t eligible for loan programs that are backed by the government so FHA or VA loans are off the table and you will most likely use a Conventional home loan.
Understanding the maintenance and additional costs of your vacation home in Oregon
There are many costs for maintaining the winter home that you should take into consideration. First, take into account how your home will be taken care of while you are not there. Will you hire a landscaping and/or cleaning company to cover the upkeep of the home while you are not there? Or do you have the time to travel to the home to take care of these tasks yourself?
For a winter home, you should also anticipate higher electric and heating bills with a colder climate than you may be used to. You will also need to take extra precautions to protect pipes and outdoor water spouts from freezing.
Last but not least, take into account how much time and cost it will take to travel to your Oregon winter home each time you want to visit. If the distance and cost may deter you from enjoying your home away from home you may want to think twice.
Begin your winter adventures
At Sammamish Mortgage, we’ve been in the mortgage industry since 1992 and are ready to share our expertise about purchasing your winter vacation home in Oregon. We will walk you through each step of the home financing process so you can put in an offer on a home with confidence. Your dream of owning a winter getaway may be closer than you think so contact us today!