Buying a second home or \'vacation\' home is very much like buying your primary residence. As far as lending goes, you will supply the exact same documentation as in any other home loan. However, there are a few variances that a buyer should learn if they are in the market for a second place in which to live.

Understand How Lenders Classify a Second Home

When you apply for a mortgage for a second home, your lender must validate that your new property meets the criteria for a second residence. The first thing that your lender will look at is the size and price of the secondary residence as compared to the primary residence. The second home must be less in size and price than the primary residence. The next thing that your lender will check is whether or not the second home is at least 100 miles away from the primary home.

For many second home buyers, their desired property does not meet this set of requirements to be labeled as a second home by a lender. The situation is different for every buyer and lender and for each circumstance, so do not give up on buying that second home quite yet. The down payment difference between a primary residence and a second home is small. In most cases, buying that second home is easier than purchasing an investment property. It will depend on what mortgage you choose, but your down payment will most likely be between five and ten percent. Remember that the more you put down, the lower the interest rate that you will be offered and the lower your monthly payment will be.

Ask Your Lender About Variations Between Financing Options

When buying a second home, you have the same availability in loan products as when you finance a primary home. However, you might want to research other options for financing. Discuss your long-term and short-term plans with your lender. If you plan on keeping your second home for the long haul, a fixed rate loan would suit you best. On the other hand, you might consider this home a shorter termed investment. If this is the case, an adjustable rate mortgage, or even a balloon could be considered. These loans could get you into a home with a much lower rate than a fixed, and thus save you money.

Be Informed When Buying a New Second Home

Many second home mortgages get the same rate as a first home purchase. Some circumstances in a buyer\'s financial portfolio can affect the mortgage rate. In most cases, the increase is only one-eighth of a percent. Rarely will the increase exceed one-fourth of a percent.

If you are curious, you can take the going interest rate when considering payment possibilities. Use a mortgage calculator and factor in at least 5% down payment. Find the posted interest rate, add a quarter percent to be safe, and play with the figures. Make sure and take the interest paid per year into account. We can all use another tax deduction. If it is in your budget and would improve your quality of life, why wait? 

For some awesome beach properties, try looking at Leucadia real estate or Ocean Beach Property on MLS for your second home in San Diego, CA.