The summer vacation season brings excitement and joy to many people, as they count down the days until their annual summer getaways. For many others, however, the season instills a touch of sadness, while they dream of owning a second home for lazy vacations and weekend retreats. If you are one of these second home dreamers, then your first consideration should be deciding how you would finance this second home. There are many ways through which you can do this, and we will discuss the three best options.

Option 1: Cash

For many homeowners, an all-cash purchase is the best option for financing a vacation home. Although this option requires a lot of time and saving, this will ultimately ensure that the homeowner does not fall into debt. According to RealtyTrac, about 29 percent of homes purchased nationwide at the end of 2015 consisted of all-cash sales.

Option 2: Home Equity Loan

A home equity loan is a great option for homeowners who have substantial equity in their property. It is important to note that lenders are less willing to approve a home equity loan to homeowners with marginal equity because, in some cases, it drains too much equity from the principal residence.

Option 3: Conventional Loan

Conventional loans are another option for purchasing a vacation home, but be prepared to pay higher interest rates and make a substantially larger down payment on the property. According to Investopedia, the minimum down payment for a vacation home has risen to roughly 30 percent in many U.S. locations.

Overall, if you are dreaming about buying a vacation home, start saving some cash and settle any outstanding debt, then approach our home mortgage specialists to review your options.