Vacation Home Loan Question

[Cris Johnson]

I am curious if anyone has refinanced into a vacation home loan/ second home loan? I’m looking at purchasing a vacation rental and was speaking with my lender about using hard money to purchase the home then refinancing into a vacation home loan. They thought it wouldn’t be an issue. Has anyone tried this or something similar and had any hang ups/issues?

[Chris Levarek]

@Cris Johnson You would still need the 20% for the hard money loan. That aside, the closing costs(1st loan) and holding costs of 6 months(between the new refinance), might not make it worth it either way. 

Example, spend 20k in hard money holding and primary loan costs. Refinance, spend 5-10k in closing costs. Now out 30k with a refinanced loan, which might just be close to the 10% you are trying not to spend on a down payment.

There are other bank lenders who lend on str income as well. Could be worth a look. A google search might help.