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Cottage on the beach

As of June 25, 2018, we’ve made some changes to the way our mortgage approvals work. You can read more about our Power Buyer ProcessTM.

Every once in a while, we need to go somewhere we can just get away from the everyday hustle and go sit by the lake or the slopes. Wherever that little slice of heaven is for you, you may find yourself constantly wanting to go back there. It may be time to buy that little cottage you’ve had your eye on.

If paradise seems to be just a cottage house away, here are some things you should think about while you’re getting ready to buy.

Location, Location, Location

Before we get into the considerations around buying a cottage, let’s talk location. This element touches nearly everything you need to think about in the selection of your vacation home.

You should visit locations in the area you would like to get your cottage house, in order to find one that’s perfect for you. If you plan to be there for multiple seasons, visit at various times of the year to determine if this is the right place for you.

Consider amenities that are important to you. Do you need beach or boat dock access, or can you save a little money by having the lake a few minutes down the road? If you’re on the ocean somewhere, can you handle the extra homeowners insurance costs that might come with being in a hurricane zone? Are property taxes cheaper here or in the next town over?

Is it someplace you could escape to time and time again? I could go back to my aunt and uncle’s cottage on the lake for late-night domino games every summer. Not everyone is like me. If the idea of going to the same place year after year sounds like it would get a little stale, maybe you should check into a timeshare. Many hotel chains offer timeshare programs that allow you to go anywhere they have a property. Just make sure you read the contract to know what you’re getting into.

Your Plans for the Space

Once you’ve decided a second home will be your personal fortress of solitude, it’s important to determine what you need from the actual house.

If you plan on having your family there all the time, it may help to plan for an extra bedroom or bathroom. The more you can plan for ahead of time, the easier finding the appropriate fit will become. On the other hand, if you’re just looking for your own getaway in the woods, maybe you can get by with one bedroom and a water closet.

If you’re feeling a little bit creative, you may be able to hack your space and find unconventional areas to fit an extra bed or six. My aunt has converted her basement into sleeping quarters for about eight people.

As long as you know what your vision for the home is, you can use it to find a space that works for you.

Line Up Your Financing

It’s important when you’re going through this process that you have your financing in order. This way, you’ll know exactly what your budget is and can make a solid offer that you can back up.

Preapproval from a lender will make you look like a serious buyer and that much more attractive to the seller of that dream cottage you have your eye on.

To purchase a second home, it’s important to note that you may need a high credit score, and you may have a slightly higher mortgage interest rate than on your primary home. This is to account for the higher risk lenders and investors are taking. If something goes wrong, you’re going to make the payments on your primary residence first.

You can also choose to rent out the vacation home when you’re not in it. Just be aware that your lender may consider it an investment property at that point, which will translate to a higher rate as well. You also have to report the rental income on your taxes if you rent out the property for 15 or more days per year. It’s just something to keep in mind.

Policies regarding what constitutes a second or vacation home versus an investment property vary from lender to lender, so make sure your lender is clear with you on this upfront.


If you have a cottage, it may make sense to shut off certain utilities when you’re not there in order to save on expenses. This works with things like cable and air conditioning, but you may want to be careful.

You have to think ahead when it comes to winterization. If you just shut off the heat, the pipes could freeze and then you’ll be in a world of trouble. On the other hand, you could shut the water off and avoid that problem altogether if you know you’re not coming back for a while. It’s all about planning.

Are you ready to get that cottage now that you know what to expect? Read up on financing a second, vacation home in order to get started. If you have any questions, you can share them with us in the comments.

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This Post Has 2 Comments

    1. Hi Philip:

      I’m going to have one of our Home Loan Experts reach out and drop some knowledge regarding whatever questions you may have. Thanks!

      Kevin Graham

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