Can a second mortgage be used to buy a holiday home using the bank as a resource?

Second home mortgage: What are the conditions for financing the purchase of a second home?

Having a second home is the dream of many families - whether for vacations, renting, or as a long-term investment. But is it possible to apply for a second mortgage? And what do you need to know before moving forward?

Yes, it is possible to have two mortgage loans

There is nothing preventing having more than one housing credit simultaneously. As long as you have the financial capacity to assume the charges, banks can approve a second loan for the purchase of a new home.

However, the risk analysis will be more demanding, as it already has a fixed monthly burden with the first credit.

In what situations does it make sense?

A second mortgage can be used for:

• Buy a vacation home;

• Invest in a property for rent;

• Acquire a property for a child, keeping the property in your own name.

• Buy a new home while keeping the current one.

What will the bank analyze?

When requesting a second loan, banks will carefully evaluate:

• Your effort rate: Sum of loan installments compared to monthly income. Ideally, it should be below 35%-40%.  

• Your financial and professional stability;

• Credit history (no defaults);  

• The value of the property and the initial down payment.

• The Loan-to-Value ratio (LTV) - in general rule, you will have to make a down payment of more than 10%-20%, as it is a non-permanent residence.

Interest rates and conditions  

The second credit will have different conditions from the first: 

• Payment deadline can be shorter;  

• Spread may be higher.

• The financed amount tends to be lower (maximum 80% of the purchase or appraisal value);  

• The required insurance are the same, multi-risk and life insurance.

Having two homes can be an achievable goal - as long as it is planned responsibly.

Read more: https://www.poupancanominuto.com/artigos/credito-habitacao/segundo-credito-habitacao-como-funciona

Before moving forward with a second home loan, simulate various scenarios with different banks. For that, credit intermediaries from Poupança no Minuto can help evaluate your financial capacity, collect proposals, and assist in choosing the most suitable for you! They handle the entire process for you, at no cost. Contact them and start today: