7 questions to ask yourself before buying a second home by Libby Kane on Jul 28, 2016, 2:13 PM Advertisement
 Second homes aren't just for the 1%. "Anyone in any income bracket can afford a second home if they set themselves up to do it," luxury real estate expert Shane Herbert of Park City, Utah tells Business Insider. "In Park City, we sell $80,000 condos and $20 million homes. The media is so focused on the 1% and what they can do in the world, but there are so many opportunities for everyone." If you have the money, what next? Below, find seven questions to ask yourself as you hunt for your second home. SEE ALSO: ASK A FINANCIAL PLANNER: Should I get a 15- or 30-year mortgage? 1. Do I really understand what it takes to carry a second home? Even if you're flush with cash, Herbert says most people underestimate the cost of carrying a second home. "It's two of everything," he says. "Two tax payments, two insurance payments, having to pay someone to cut the lawn twice." Plus, he cautions that lending standards might be more stringent in second-home markets. "People need to be prepared to put more down if they're going to seek financing," he says. "The lender could ask for as much as 30% down if you're buying something like a resort condo. Knowing what type of product you're buying might dictate how much you need to invest initially." In addition to a higher down payment, a lender might look for extra documentation that the buyer has extra cash on hand or a lower-than-usual debt-to-income ratio. "Think: Do I have time to finance this property?" Herbert suggests. "Lenders generally put the buyer under more scrutiny on their second home."
2. How much time will I spend there? If you can float the cost of your second home today, it's time to look a few years into the future. "How much time will you spend there?" Herbert asks. "How many years will you enjoy the property? Are your kids five, and you want to own through senior year of high school?"
 3. What type of memories do I plan to make there? What's the lifestyle I will live? Once you know how long you want to be there, it's time to consider how your family's life there will change over the years. This summer, you might have elementary school kids who just need a sprinkler and a local ice cream joint to be happy. But what about when you have teenagers? Herbert points out that in Park City, most of the second-home owners are seeking a lifestyle where the family can ski together. "But you might find out later that all members of your family don't ski," he says. "Make sure you're not focusing on one area because you think that's the activity your family will enjoy for the next few years." One of the best ways to get an idea of what life is really like there is to talk to people who live in the community, he says. Ask the Chamber of Commerce and your realtor if there's anyone you can talk to about the local lifestyle.
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