4 Steps For Buying A Second Home In Santa Cruz

If you’re thinking of buying a second home, you may not realize that the process is a little different than buying your primary home. While all the basics are the same, there are some things to keep in mind when choosing a new property. Here are 4 steps for buying a second home in Santa Cruz without the headaches.

Set Your Budget

This is the key first step to buying a second home in Santa Cruz, as you need to know how much money you’re working with.

If you still owe money on your primary residence, make sure that you don’t stick to the traditional advice to use your income and expenses and determine how much home you can afford. Instead, you need to be sure that you’re fully factoring the cost of owning both properties and carrying two separate mortgages.

That means you need to make sure that, whatever price point you set, you’re comfortable paying that amount each month as well as taxes, repairs, insurance, and utilities, as well as any other upgrades and fees you may need to pay.

Another thing to remember is that most lenders will require you to pay 20 percent of the purchase price as a down payment, meaning you’ve got to have significant savings before you start looking.

Choose a Location

As the old adage goes, “location, location, location” is key in choosing real estate.

The location you can afford within Santa Cruz will be largely determined by the budget you’re willing to spend when buying a second home. If you want to purchase in a more expensive neighborhood, for example, but don’t feel comfortable paying the going market rate for properties, you may need to consider a different location.

If it turns out that the neighborhood you initially wanted to purchase a home in is out of your price range, start thinking about what you need and want in a neighborhood.

Do you want it to be close to amenities such as a gym or the beach? Should it be on public transportation routes or be walkable? Are you dead-set on a gated community or another type of neighborhood?

Rank these wants and needs in order of importance and use them to help you choose a location that suits your needs and is within your price range.

Hire a Local Agent

Even if you feel you know the area well, nothing beats having someone whose job it is to know the ins and outs of an area’s real estate market help you with buying a second home.

This is especially helpful if you live far from Santa Cruz, as the agent can keep an eye on available properties and pre-screen homes without you being there.

A real estate agent’s job is to thoroughly understand the area where they work, so your real estate agent can help you determine a reasonable budget, select a neighborhood, find available properties, and more. You also can get some key insight into what it’s really like to live in Santa Cruz, making it easier to find grocery stores, movie theaters, and more.

Get Pre-Approved

Having a letter in hand that says how much money you’re approved to borrow can make buying a second home much easier.

Once you’ve got a budget in mind, work with your lender to receive pre-approval for a mortgage. They can give you a pre-approval letter that you can show to your real estate agent and any sellers.

This document is a good-faith sign that you can afford the mortgage on a property you’ve chosen, giving the sellers more peace of mind in accepting your offer over someone else’s.

If you’re ready to take a leap and begin the process of buying a second home in Santa Cruz, contact us at 831-588-2334 today!

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