What to Know About Buying a Second Home or Investment Property in Southern Wisconsin or Northern Illinois
Owning a second home or investment property is an exciting milestone. Before taking the next step, it's important to understand how you plan to use the property and your financial options. At First National Bank and Trust (FNBT), we're here to guide you through the process, offering expert advice and mortgage solutions to help make your second home a reality.
Homeownership is part of the American dream, and for many, that may include owning more than one home. Knowing how you want to use your second home or investment property and finance it is the first step to making it a reality, and at First National Bank and Trust (FNBT), we’re always here to help you make sense of your major financial decisions and how to fund them.
FNBT has been Southern Wisconsin’s and Northern Illinois’s trusted financial partner for over 140 years. As a family-run business, we are committed to being dependable when it matters most. We pride ourselves on delivering exceptional customer service and providing approachable solutions tailored to each customer. With resilience at our core, we continue to evolve to meet the needs of our customers and community.
Let’s break down the main points to consider when purchasing a second home or investment property, including our different funding options. This will help you be better informed when you connect with an FNBT mortgage lender.
How Will You Use Your Second Home or Investment Property?
The first step to consider when buying a second home or investment property is how you will use it. Will it be a vacation home, rental, or something else? Let’s look at some of the most common usage for a second home and investment property:
- Vacation home
- Vacation rental property
- Residential rental property
- Multi-unit investment properties
- Future retirement home
Determining property use is important because there are rules, financial implications, and taxes to consider depending on your decision.
Take a look at this article from Travelers that provides more details about second-home usage types and additional considerations that can help you be more informed about your decision.
Vacation Homes in Wisconsin and Northern Illinois
We all know that our area has many locations with breathtaking views and landscapes. Choosing a vacation home near your primary residence is an easy and great way to enjoy your second home without a long trip. There is a wide range of homes to select from in and around Wisconsin that would make a perfect vacation home. If you feel like getting out of the state, try searching in
Northern Illinois.
Vacation Homes Outside of the State
Feeling more adventurous, enjoy longer road trips, or want to use your vacation home to generate investment rental income? Then we recommend viewing this article on the
top 10 places to buy a vacation home, giving you a great starting point for further research.
What to Know About Investment Properties
If you are more interested in buying an investment property with no intention for personal use, then selecting the right location where your investment can yield strong returns is essential. Take a look at this article that highlights
10 cities for investment properties that top real estate agents recommend.
Expenses to Consider When Purchasing a Second Home
Just like purchasing your first home, understanding incurring expenses can help you budget how much you can spend on a second home. This is a list of the more common expenses, and your FNBT mortgage lender can help you fill in any gaps during the application process.
Fees
There will be monthly HOA fees if you purchase a condo or a home in a community with an HOA. Do your research on how it will impact your budget before making a decision.
Property Maintenance
If you are planning on using your second home for either vacation or full-time residential rental, then you may want to hire a property manager to perform basic maintenance and assist with any repairs. Your real estate agent can help with recommendations that fit your budget.
Winterizing
We all know winters can be harsh in our area. If you will not be at your second home during the winter, it is important to make sure it is
properly winterized.
Insurance
Similar to your primary residence, you will need homeowner’s insurance. If you intend to use your property as a rental or investment, be aware that
rates are typically higher.
Make Sure You Can Afford to Purchase a Second Home
Purchasing a second home is a big financial responsibility, but we have resources to help make sure you are prepared.
Read about how to get a home loan in Southern Wisconsin or Northern Illinois, then use our
Mortgage Calculator Tool to give an idea of how much your monthly payment could be.
How to Fund Your Second Home Purchase
FNTB has a variety of loan options to fund the purchase of your second home. Take a moment to dig deeper into our loan products to help you determine which is best for you. And, of course, if you have questions or you’re not sure which option to choose, you can
contact a FNBT mortgage lender who can help.
FNBT home mortgage products:
- Conventional Mortgage – a standard loan that maintains the interest rate for the full term of the mortgage
- Mortgage Refinancing - update the terms of your current mortgage and pull equity from your home
- Primary residence Home Equity Loan – a single payment that is repaid over a set period of time while pulling equity from your home
- Primary residence Home Equity Line of Credit - revolving credit that you use as needed while pulling equity from your home
- Jumbo Mortgage – for purchases exceeding the limits of conventional loans, which is $806,500 in most counties
Start an Application For Funding The Purchase of a Second Home
Now that you know more about owning a second home, it’s time to get started! Contact one of our mortgage lenders today to begin your application and start the journey to your new second home! As a local, independent bank for more than 140 years, FNBT is deeply invested in Beloit, Argyle, Monroe, Darien, Delavan, Janesville, Elkhorn, Clinton, Walworth, and Williams Bay, Wisconsin, and Winnebago, Roscoe, and Rockton, Illinois.
Learn more about us and our full suite of financial products and solutions.