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Often, those looking to purchase an additional home get confused between a second home and an investment property. However, the two are not interchangeable ” especially when it comes to their financing.

Second Home, Defined
A second home is real property that the homeownerintends to occupy in addition to their primary residence for part of the year. Usually, second homes are used as vacation homes. Second homes may also be properties that the homeowner visits on a regular basis.

Examples of second homes may include:

• A condo in a city where you frequently conduct business
• A beach house that you and your family occupy during the summer months
• A house in a different state where you have seasonal work

Getting a Mortgage
If you can’t purchase a second home out-right, you’re going to go the traditional route and look into obtaining a mortgage. In order to qualify for a second-home loan, the property is usually required to be located in a resort or vacation area (like the beach or mountains), or be a certain distance from the borrowers primary residence.

Understanding Interest Rates
Most lenders consider second homes to be more of a risk than primary residences, but not as big a risk as investment properties. Typically, interest rates will show this; second-home mortgages may have lower interest rates than investment property loans, but not necessarily. It can all depend on the borrowers entire financial picture.

Understanding Rules
Second-home loans often include a second-home rider along with the mortgage. This rider states certain rules the borrower must abide by in order to qualify for the loan.

These rules often include the following:

• The borrower will occupy and use the property as his/her second home
• The property will be kept available for the borrowers exclusive use and enjoyment at all times
• The property cannot be used as a timeshare or be subject to any rental pool arrangement
• The property cannot be subject to any agreements that require the borrower to rent the property or give a management firm (or anyone else) control over the use and/or occupancy of the property.

Published with permission from RISMedia.

Selling your home will involve a lot of paperwork. The requirements may vary somewhat depending on where you live, but the following are some of the most important documents youll likely need:

Documents From Your Purchase of the House
Youll need the original sales contract from the time when you bought the house. Thatll let the buyer know who the previous owner was, the sale price at the time, and any disclosures that were made then. Youll also need to provide the appraisal that was conducted before you bought the house.

Documents Related to Maintenance, Repairs and Current Problems
You shouldve kept records of maintenance and repairs during the time you owned the house. Those can give the buyer an accurate idea of the condition of the house now and any repairs that might be needed in the future. If you had any new appliances installed, you should give the buyers the warranties.

Youll also need to provide a potential buyer with homeowners insurance records. These should include any claims you submitted so the buyer will be aware of any significant past damage and repairs that were made.

Once a buyer has made an offer and youve accepted it, youll need to follow mandatory disclosure laws and provide information on any known damage or hazards. That could include everything from lead paint and water damage to broken appliances and disputes over the property line. Failing to provide this information could lead to a lawsuit later.

Documents Needed to Complete the Transaction
A purchase offer spells out the agreement between the buyer and seller. The real estate agents or attorneys representing the buyer and seller will later draft a final purchase and sale agreement that includes specifics on the sale price as well as other terms, such as the closing date and contingencies.

The buyer will most likely have the house inspected to find out about any problems. If anything serious is discovered, you and the buyer will need to decide whether youll make repairs before closing or lower the asking price.

If the buyer will need to get a mortgage to buy the house, the lender will require an appraisal to determine its value. The appraiser will provide the buyer with a report, and a copy will be made available to you.

The deed is a document that officially transfers ownership from the seller(s) to the buyer(s). It will include the names of all parties involved in the transaction and a description of the property itself.

Working With the Right Real Estate Agent Is Key
Selling a house is complicated. Your real estate agent should be able to guide you through the process. When interviewing agents, look for someone who has the knowledge and patience to walk you through all the steps and the documents thatll be required and to answer all your questions.

Published with permission from RISMedia.

Home offices can be hubs of productivity for business owners and telecommuters alike. However, an office space that isnt designed and equipped for optimal results can lead to distraction, inefficiency and frustration. So, how can you create the ideal home office?

Choose Your Spot
First, youll have to determine the best place to set up shop. If space is limited, you might not have a choice about where to create a home office. Optimally, youll want a separate, spacious room that provides privacy, especially if you share the home with family members or roommates. Try to be away from high-traffic zones, such as the kitchen and living room, which are bound to be noisy and distracting. Separating your work space from your living space will also help you stay focused and avoid overworking after office hours.

Stay Dedicated
Even if you cant create an office in a separate room, establish a dedicated works pace and set some ground rules for other household members in order to protect your area and materials. To avoid losing work on your office laptop, for example, let children know your computer is for business only. If youll be using a land line for your office phone, consider getting a business line separate from your home one.

Get Comfortable
Because youll spend hours each day in your home office, staying comfortable is critical. Not only will you avoid minor aches and pains, but you can also reduce your risk of long-term health effects, such as back issues and carpel tunnel syndrome. Investing in a pricier, ergonomic chair is worth every penny, and consider installing a pull-out keyboard tray. To avoid sitting for extended periods, you could also buy a stand-up desk.

Be Prepared
Make sure you have all the office equipment youll need, which might include a copy machine, printer, scanner and, of course, a reliable computer with proper software. Youll also likely need a fast internet connection, and dont overlook smaller office supplies, such as Post-it Notes, scissors, paper clips and pens.

Decorate
Like with a work space at a company building, youll want to personalize your home office. Incorporate photos, paintings, plants or other personal touches. If you plan to have clients or co-workers visit, though, make sure your office looks professional by not going overboard with decorations.

A rooms color can impact a persons mood, so consider which color you should paint your office walls. Some designers suggest soothing hues like seafoam green to keep you relaxed and decrease stress, while others suggest bold colors like red to keep you alert and boost productivity. Test out a few colors to see which works best for you. You can also mix it up by painting or designing one focal wall differently.

Light the Way
Improper lighting can lead to eye strain, headaches and fatigue. Make sure you have plenty of overhead light and task lighting”i.e., desk lamps”and try to avoid fluorescent bulbs. If possible, set up your work space where you can take advantage of a windows natural light.

Avoid Clutter
Keep your office clean and organized to maintain peak performance, avoid losing papers and limit work frustration. By using helpful products, such as filing cabinets, pencil cups and desk trays, youll know where everything is. Remember, less time searching for an item means more time focusing on work.

Published with permission from RISMedia.

When a prospective buyer has found the right house and agreed to a price with the seller, the buyer can make a contingent offer. That means that the transaction will proceed, as long as specific contingencies, or conditions, are met. Those contingencies are essential to ensure that each party is aware of all relevant facts and able to make an informed decision. If the contingencies are not met, the would-be buyer can decide not to purchase the house and keep the earnest money provided.

Inspection
The most important contingency from the buyers perspective is the home inspection. A professional inspector will thoroughly check the house for any problems that may not be readily apparent. An inspection should cover everything from the roof to the electrical wiring, plumbing, foundation and possible mold.

If an inspection discovers any cause for concern, the problem will need to be addressed. The buyer can ask the seller to fix the issue as a condition of sale, or the seller can decline to make repairs but agree to lower the sale price. If the parties are unable to reach an agreement, the buyer can decide not to purchase the house and walk away.

Appraisal
An appraisal is another contingency thats designed to protect the buyer. An independent third party will calculate the current fair market value of the house. If the appraised value is less than the asking price, the buyer can renegotiate with the seller or walk away.

If the buyer loves the house and is willing to pay more than the appraised value, obtaining a mortgage may be problematic. A lender will approve a loan up to a percentage of the appraised value. If that number is less than the sale price, the buyer will have to make up the difference with a larger down payment.

Mortgage
If the buyer isnt paying cash, an offer will be contingent on mortgage approval. A buyer may think he or she will qualify, but a lender can reject an application for a variety of reasons. A buyer whos pre-approved for a mortgage may be unable to complete a purchase if the appraised value turns out to be lower than the sale price and the buyer is unable to come up with enough money for a bigger down payment.

A buyer whos unable to obtain a mortgage can walk away. This contingency also helps the seller avoid waiting months for a buyer to get approved for a mortgage and having to turn down other offers in the meantime.

Discuss Contingencies with Your Agent
After a buyer and seller have agreed on a sale price, its natural to want to move quickly, but contingencies are designed to protect both parties. Whether youre buying or selling a house, discuss the importance of a home inspection, appraisal and mortgage approval, as well as the potential ramifications of unforeseen problems in any of those areas, with your real estate agent.

Published with permission from RISMedia.

Once a buyer and seller have agreed on the price for a house, they sign a purchase contract that outlines the terms of the deal and includes a closing date. Setting a specific date is intended to motivate all parties involved in the transaction to work expeditiously to fulfill their duties. Sometimes, however, things dont go according to plan and the closing is delayed.

Reasons Why the Closing May Be Delayed
A real estate deal may not be able to close on the anticipated date for a variety of reasons. Sometimes the buyer is unable to get approved for a mortgage. Even if the buyer was pre-approved, a recent increase in debt couldve made the persons debt-to-income ratio too high and caused the lender to rescind the mortgage offer or change the terms. The buyer may also be unable to get a mortgage because the house was appraised for less than the sale price. The home inspection also couldve uncovered serious problems that need to be fixed prior to closing, such as roof leaks or mold.

What Happens If You Cant Close on Time
The purchase agreement should specify whatll happen if the closing is delayed. If one party is clearly responsible for failing to meet the target date, that party will have to pay financial penalties. The contract may specify a variety of penalties for different scenarios. The penalties may be flat fees or may be calculated in other ways.

If the buyer is unable to close on time, he or she may be required to pay the sellers mortgage on a prorated basis until closing. If the seller is responsible for the delay, he or she may have to pay for the buyers unanticipated living costs until closing.

A lender may refuse to approve a mortgage for more than the appraised value of a house. If the house was appraised for less than the agreed-upon sale price, the parties may have to renegotiate the price.

If the closing is delayed because the inspector found serious problems, the parties will have to decide how to proceed. The seller may be willing to make repairs before closing. If the buyer cant wait to move in, the seller may be willing to lower the purchase price to account for the cost of repairs. If the problems are major, the buyer may decide to cancel the deal.

Discuss Potential Delays With Your Real Estate Agent
If you have any reason to think that you might miss your closing date, talk to your real estate agent. He or she might be able to help you find a solution or work with the other party to make modifications or concessions so you can proceed as close to schedule as possible.

Published with permission from RISMedia.