Buying a winter vacation home? Here’s what to know before you take the plunge.

By Harvey S. Jacobs

With the winter weather upon us and wind-chill factors part of the regular weather broadcasts, one’s thoughts drift to the possibility of owning a getaway home in a warmer climate. Here are some tips on making that purchase.
Before you begin your search, you will need to have some idea of the type of lifestyle your second-home purchase will provide. Some folks are looking for nothing more than direct access to the white sands of a sun-drenched South Florida beach. Others dream of a home overlooking the 18th fairway, steps away from the year-round golf and tennis country club. A deep-water boat slip may be an absolute must for the sailors. If you are like the other 90 percent of the home-buying population, you will start your dream-home search on the Internet.

Numerous Web sites provide robust search engines to allow you to quickly home in on the exact area and type of home that will keep you warm over the long, cold winter months. The granddaddy of these sites is Realtor.com. This site allows you to search by: type of home; location; numbers of bedrooms and baths; and price range. Listings are updated every 15 minutes. Because this site is run by the National Association of Realtors, it will also provide you with links to the listing agent. Similar sites, such as FSBO.com, also provide direct access to owners selling their homes without a real estate agent.
It’s a myth that financing is more expensive for a second home. According to Bill Rozek, senior loan officer with Embrace Home Loans in Rockville: “Rates for second homes are basically the same as for principal residences. The difference is in the down payment requirements.” Buyers of principal residences can put as little as 3.5 percent down using Federal Housing Administration financing, or 5 percent for conventional financing. FHA financing is not available for a second home, and conventional financing requires a minimum 10 percent down. “Money for second homes is readily available, but you must have good credit to get good rates,” Rozek added.
Money is even available for real estate investors in warm climates. According to Gregory Hayden, a mortgage banker with PNC Mortgage in Delray Beach, Fla. Investors with credit scores of 740 and above should expect to make at least a 20 percent down payment and to pay three points to obtain a loan at the market interest rate. Hayden also noted that closing costs for Florida real estate may be slightly higher than for cold-weather states but that because Florida does not impose a state income tax, and because annual property taxes are significantly lower than in the Northeast, those costs are more than offset.
Warm climates present factors that complicate insuring homes, especially near water. Insurance costs can vary widely and are a significant factor in your home-buying decision. There are basically three types of insurance that second-home owners should address: homeowners multi-peril (fire) insurance, wind (hurricane) coverage and flood insurance.
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