Second Home Mortgage

Second Home Mortgage — Finance Your Vacation or Second Property

Buying a second home is one of the most rewarding financial decisions you can make — whether it’s a beach house in Florida, a mountain retreat in Arizona, a lake home in Michigan, or a getaway property in Texas. But financing a second home works differently than financing your primary residence, and it’s important to understand the rules before you start shopping.

At First Commerce Financial, we help buyers across Michigan, Arizona, Florida, and Texas navigate second home financing with complete transparency — no junk fees, no surprises, just the right loan for your situation.

 

What Qualifies as a Second Home?

Lenders have specific requirements for what counts as a second home versus an investment property — and the distinction matters because it affects your rate, down payment, and qualification guidelines.

To qualify as a second home, the property typically must:

  • Be occupied by you for some portion of the year
  • Be a one-unit property (single family home, condo, or townhouse)
  • Be located a reasonable distance from your primary residence
  • Not be subject to a rental management agreement or timeshare arrangement

If you plan to rent the property out for the majority of the year, lenders will likely classify it as an investment property — which has different loan guidelines. We’ll help you understand which category your situation falls into.

 

Second Home Loan Programs

Conventional Second Home Loans

Conventional loans are the most common option for second home financing. Key features include:

  • Down payment: typically 10%-20% of the purchase price
  • Credit score: generally 680+ for the best rates
  • Debt-to-income ratio: typically up to 45%
  • Rates are slightly higher than primary residence rates — usually 0.25%–0.75% higher
  • No rental income from the property can be used to qualify

Conventional second home loans follow Fannie Mae and Freddie Mac guidelines, which means competitive rates and flexible terms for qualified buyers.

Jumbo Second Home Loans

If the property you’re purchasing exceeds conventional loan limits — currently $832,750 in most markets — you’ll need a jumbo loan. This is common for higher-end vacation properties in markets like Scottsdale, Naples, or the Florida Keys.

  • Higher loan amounts — no conventional conforming limit
  • Typically requires
  • Strong credit and reserves required
  • Rates competitive with conventional jumbo pricing

We have strong relationships with jumbo lenders and work these deals regularly. If your second home purchase is in a higher price range, we know how to get it done.

 

Second Home vs. Investment Property — Key Differences

Second Home

  • Lower down payment (as low as 10%)
  • Better interest rates
  • Must be occupied by you for part of the year
  • Cannot use rental income to qualify

 

Investment Property

  • Higher down payment (typically 20–25%)
  • Slightly higher interest rates
  • Can be rented out full time
  • Rental income may be used to help qualify

Not sure which category your property falls into? Give us a call — we’ll ask the right questions and point you in the right direction.

 

Popular Second Home Markets We Serve

Our clients purchase second homes across a wide range of markets in the four states we serve:

  • Florida — Gulf Coast beach towns, Orlando area, the Keys, Space Coast
  • Arizona — Scottsdale, Sedona, Flagstaff, Lake Havasu
  • Michigan — Northern Michigan, Traverse City, lake properties throughout the state
  • Texas — Hill Country, Lake Travis, Gulf Coast

No matter where in these states you’re buying, we can help you finance it.

 

Frequently Asked Questions

Can I rent out my second home?

Yes — but with some limitations. You can rent out a second home on a short-term basis (like Airbnb or VRBO) and it can still qualify as a second home, as long as you also occupy it personally for some portion of the year. If you plan to rent it out full time without personal use, it will be classified as an investment property.

Do I need to sell my current home first?

No. You can carry two mortgages simultaneously as long as you qualify based on both payments. We’ll look at your full financial picture and tell you exactly what you can afford to carry.

Are second home mortgage rates higher than primary residence rates?

Yes, slightly — typically 0.25%–0.75% higher than rates on a comparable primary residence loan. The exact difference depends on your credit score, down payment, and loan amount. We shop multiple wholesale lenders to find the best rate available for your scenario.

Can I use rental income from the second home to qualify?

For a property classified as a second home, no — lenders won’t count rental income toward your qualifying income. If rental income is important for qualification, the property may need to be financed as an investment property instead.

What credit score do I need?

Most conventional second home loans require a minimum 680 credit score, though a 720+ will get you the best rates. We’ll pull your credit early in the process and let you know exactly where you stand.

 

Let’s Talk About Your Second Home

Whether you’re dreaming about a Florida beach house or a Michigan lake cottage, we’ll help you figure out exactly what you qualify for and what it will cost — with no pressure and no obligation.

Licensed in Michigan, Arizona, Florida, and Texas.

📞 Call us at (248) 459-5511

✅ Or get started online — we’ll have answers for you fast.

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