How to Afford a Second Home

Today, many Americans have the dream of having a home away from home. Last year, thanks to the aging baby boomers and tax code changes, second home sales made up almost a quarter of the residential real estate market.

The big question is "How can I afford a second home?" Downsizing is popular right now for baby boomers. With a pocket full of cash equity, many are selling their larger homes and purchasing a smaller home and a vacation house or investing in rental property. In 2004, almost 1/3 of residential property buyers who financed were using money from the sale of a primary residence, according to a survey by the National Association of Realtors.

Today the larger down payments and higher interest rates have been erased thanks to competition. Some lenders may still charge a little because of the risk in a home that is not constantly monitored by the owner. Of course, when financing a second home, you must make enough income to cover both of your principal residence and your vacation house.

Listed below are some tips for financing a second home:

Identify your primary goal. Why do you want a second home?

Apply for financing in the town where you are looking to buy. Bankers may give better terms because of the market.

Caution: You will be paying two of everything! Budget wisely!

Don't hurt yourself financially. Remember the reason you are purchasing a second home is for relaxation. You do not need money troubles to stress you out.

Carefully check out Internet loan sites.

Many people will purchase a vacation home together with family or friends. A big issue here would be the availability of the house. There are many ways to divide the time up, so don't let that be a big influence on whether to purchase your dream home. The important thing is to make sure you put everything on paper. Make contracts to cover the finances, maintenance and even how the house will be shared. Set up a calendar and mark everyone's vacation time down, therefore you won't have surprise visitors.

With a little extra planning, your dream of a home away from home can become reality!

The Best Place to Retire

Placement is one of the most important things when retiring. Distance from family, neighborhood, finances, etc. all come into play when considering your retirement location.

When house hunting for the best place to retire, don't worry about finding your dream home right away. You can always trade up later. If you have benefited from the real estate boom in your first home, you can easily put your equity to work in a second place to retire. Or you can trade down to a smaller home.

Looking for the best place to retire means the best place for you. When contemplating retirement locations, consider factors like taxes, median home price, the local night life, sports teams, golf courses, culture, educational opportunities, crime rates and the overall environment. Also, keep in mind the distance from friends and family. If you have new grandchildren, you may not want to move clear across the country. Remember, unlike some professional athletes, you're only going to retire once. So make the best choices the first time.

Your search for the best place to retire might include a factor your parents never considered: work. A recent study found that 70 percent of those 45 and older plan to continue working in their "retirement" years, another survey found that the number may be as high as 80 percent. Surprisingly, the pure enjoyment of work or a desire to try something new are significant considerations for choosing retirement locations.

One interesting trend among people looking for the best place to retire is to choose retirement places with appealing cultural and recreational lifestyles, then looking for ways to earn a living there. Some who make this jump end up telecommuting, starting a small business, or working part-time.

The best place to retire for you might be a college town. Many of those wondering where to retire were in college from the middle 1960s into the early '70s and so a college or university areas can be good retirement places. In addition, universities generate jobs and lend a youthful vibe. And they often come with arts centers, medical facilities, and good restaurants.