Hawaiian Lenders

First Fractional Funding
At First Fractional Funding, we focus exclusively on funding mortgages for fractional ownership properties. Our focus is the buyers and developers of fractional properties.

www.firstfractionalfunding.com

CountryWide-Full Spectrum Lending
Brian Bender-Account Executive
Topa Financial Center
Honolulu, HI 96813-4124
(808) 541-8010 Direct
(808) 521-5634 Fax
(888) 635-6412 Toll Free
Brian_Bender@Countrywide.com

Securing Your Financing

Loan standards for primary and secondary homes are virtually identical, especially for conventional loans, rates are about the same, unless the lender considers the house an investment property. In that case, expect to pay an interest rate about 1.5 to 2 percentage points higher.

Lenders may grant a lot of leeway when deciding whether your property is a vacation home or an investment property. Some lenders won't lend on second or third homes, others solicit them, and yet others offer normal rates without investor penalties, as long as you occupy it some of the time.

 When making a down payment on your second home, you can pull equity out of your primary home. You can either extract the equity by doing a "cash-out" refinance, or by getting a home equity loan or an equity line of credit. You can use that equity to make all or some of the down payment on the second home.

 There are complex tax implications to borrowing to buy a second home. Generally speaking, the interest is deductible from federal income taxes. But if you borrow from the equity on your first home to make a down payment on the second home, you can write off the interest on only the first $100,000 of equity debt.

If you rent out the second home, you have to spend a certain amount of time in the home every year to be able to deduct the interest. Your best bet is to read IRS Publication 936, Home Mortgage Interest Deduction and Publication 527, Residential Rental Property. Once those have confused you, consult an accountant.