Real Estate Information

Building a custom home rather than buying an existing property in Albuquerque might require a construction loan. This type of loan covers only the cost of building a custom house and covers a short time period.

Your home must then be completed before you can apply for a mortgage. You use the mortgage to pay for your completed home.

A construction loan is usually shorter-term and has a higher interest rate than a mortgage.

In most cases, loans last for a year, during which the property must be built and a certificate of occupancy must be obtained.

What Do Construction Loans Cover?

Building materials, permits, the cost of the land and your contractor's labor can all be covered by a construction loan. The money may also be useful for landscaping and appliances.

To get an accurate loan-to-value calculation, it is important to clarify with your lender what the construction loan will cover.

A contingency reserve is often included in construction loans. You can use the reserve to cover any unexpected construction costs. Your contingency reserve would be used if, for instance, you decide you would like higher-end cabinets than you originally planned.

How Do These Loans Work?

Variable interest rates are common for construction loans, so the rate increases and decreases based on the prime rate. In almost every case, the loan rate will be higher than a traditional mortgage. Conventional mortgages require you to put your home as collateral. You could lose your home if you defaulted. Since construction loans don't have this option, they are higher-risk loans, which means you pay more in interest.

The lender requires detailed plans, budget estimates, and an estimated timing for the project before providing a construction loan.

As soon as your loan application is approved, you will be put on a construction schedule, also known as a draw or draft schedule. Only interest payments are expected during this period. As you make progress on your home, your lender pays you in phases.

As major milestones are achieved, draws will take place. As an example, you may receive a drawing when your foundation is laid.

Building progress will be checked by an inspector or an appraiser during the construction process.

Your construction loan might be converted to a standard mortgage once your home is completed. This type of loan is called construction-to-permanent financing.

If you get a loan that’s only for construction, then as the borrower, you might have to obtain a separate mortgage that is then used to pay off your construction loan.

Different Types of Construction Loans

Construction-to-permanent loan

Getting a construction-to-permanent loan enables you to finance both your home construction and your mortgage. The money you borrow goes toward the construction of your home. You then convert your loan to a permanent loan when the construction is completed and you move in.

This option has several benefits, including the fact that you only have to pay closing costs once.

In the event you are converting your construction loan to a permanent loan, the repayment period usually lasts 15 to 30 years, and you pay interest and principal together.

Construction-only

Construction-only loans provide you with funding just to finish building your home, but as the borrower, you are required to repay the loan in full at maturity, which is usually within a year, or take out a mortgage for permanent financing.

The construction-only loan funds are dispersed based on the extent of the project's completion.

Construction loans may be more expensive because you have to go through two loan transactions, which means two sets of fees.

Owner-builder construction loan

Finally, there is a loan specifically for home builders. There are construction-to-permanent and construction-only loans. In most instances, the borrower and the builder are the same person, but you need to have a license to get this type of loan.

HOT ALBUQUERQUE PROPERTY OF THE WEEK!

6 WHIPPOORWILL Lane, Tijeras, NM 87059

Mountain Living at its finest! Serene, light filled sanctuary, within this custom built home spacious home with soaring ceilings and light filled rooms, a wall of windows open to the majestic Pines. Pride of Ownership. Features open floor plan. Kitchen offers an Island, ample cabinet space & countertops that flows into the dining room. Freshly stained concrete floor in great room. Three generous bedrooms, w/the primary suite & loft occupying the top level, with viewing deck. New carpet. Oversized 2cg. Wonderful outdoor entertaining spaces. New septic tank installed 7/22. And 1550 gal Water Tank system in 6/22. Nature brings serenity to this home with the Vibrant New Mexico sky. Discover wildlife such as deer, rabbits, hawks, hummingbirds, & squirrels. Close to trails, mtn biking, & I-25

Learn More!

Contact us today to help you buy or sell your next home in Albuquerque. Looking for the perfect home for sale in Albuquerque? Our easy-to-use home search tool can help you start the process. Join us twice a week on our blog for more real estate advice and great reasons to buy a home in Albuquerque and the surrounding area. Follow us on Facebook for the latest Albuquerque real estate updates.

Get your Morning Inspiration with the Sandi Pressley Team

Are you looking for a great home in the mountains or near the city? Either way, we have you covered with these latest HOT Albuquerque properties. These homes offer plenty of amenities and great locations, so they're sure to sell fast!

Contact the Sandi Pressley Team today for your exclusive showing. You can also check out all of our listings on our Featured Listings page.

6 WHIPPOORWILL Lane, Tijeras, NM 87059

Mountain Living at its finest! Serene, light filled sanctuary, within this custom built home spacious home with soaring ceilings and light filled rooms, a wall of windows open to the majestic Pines. Pride of Ownership. Features open floor plan. Kitchen offers an Island, ample cabinet space & countertops that flows into the dining room. Freshly stained concrete floor in great room. Three generous bedrooms, w/the primary suite & loft occupying the top level, with viewing deck. New carpet. Oversized 2cg. Wonderful outdoor entertaining spaces. New septic tank installed 7/22. And 1550 gal Water Tank system in 6/22. Nature brings serenity to this home with the Vibrant New Mexico sky. Discover wildlife such as deer, rabbits, hawks, hummingbirds, & squirrels. Close to trails, mtn biking, & I-25

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11015 COCONINO Road SE, Albuquerque, NM 87123

Beautiful single story 4BDR/2BA/2CG light, bright & open featuring a huge great room with gas fireplace, raised ceiling and open to the kitchen and breakfast nook for entertaining! Tile flooring! Refrigerated Air, Solar, ECO Water Softener & R/O sys! Master suite features a large walk-in closet, Jacuzzi walk-in tub! Backyard features an extended covered patio, raised garden bed, rock landscape, waterfall pond & mini putt putt course! Great location close to parks, schools, shopping & easy access to Uptown, Downtown, KAFB!

Learn More!

Contact us today to help you buy or sell your next home in Albuquerque. Looking for the perfect home for sale in Albuquerque? Our easy-to-use home search tool can help you start the process. Join us twice a week on our blog for more real estate advice and great reasons to buy a home in Albuquerque and the surrounding area. Follow us on Facebook for the latest Albuquerque real estate updates.

Get ready to wrap up summer this month in Albuquerque with these fun festivals and market. There's something to do for the whole family this weekend!

New Mexico Shakespeare Festival 2022

Aug 5 – Sep 3
New Mexico Veterans Memorial
1100 Louisiana Blvd SE #5009, Albuquerque, NM

We are delighted to announce that our exciting 2022 season will run August 5th - September 3.

King Lear will be directed by Debi Kierst

The play is about families—about fathers and daughters, fathers and sons, sisters and their husbands and lovers, brothers natural and unnatural. Ordinary jealousies, demands for love, sibling rivalries, desire for money and power, and petty cruelties are all taken to the extreme. It has been considered by many to be Shakespeare's crowning artistic achievement.

As You Like It will be directed by Julia Thudium

The play is being set in in its own time, Arden time. In this version, the mythical forest of Arden is where magic reigns and impossible things happen every day. This show will be filled with music and movement, laughter and most especially joy, joy for the audience and joy for the players.

Both shows promise to be terrific nights in the theatre, under the fabulous New Mexico sky.

2022 Harvest Wine Festival in Albuquerque

Sat, Sep 3, 11 AM
Balloon Fiesta Park
9401 Balloon Fiesta Pkwy NE, Albuquerque, NM

21 and over only with a valid ID. Enter anytime, any one day starting at 11am. Ticket includes festival access, Viva Vino wine glass for unlimited wine tastings and $5 Off any bottle of wine.

ABQ Art Market

September 3, 2022
4th Street in Los Ranchos

LIVE MUSIC, FOOD TRUCKS, DESSERT AND DRINK VENDORS, 25+ LOCAL ARTISAN VENDORS.

ABQ Art Market is a monthly evening art market held every first Saturday of each month on 4th Street in Los Ranchos. Our main goal is bringing the community back together and helping small businesses survive and thrive! ABQ Art Market is the perfect place for the whole family.

HOT ALBUQUERQUE PROPERTY OF THE WEEK!

1011 ATRISCO Drive NW, Albuquerque, NM 87105

One of a kind find!! An amazing property with incredible views of the Sandias, Rio Grande Bosque & downtown Alb city lights!! Private & versatile guest suite has its own bath, living room & entrance! Tucked back on the lot this 4BDR/3BA/2CG split level home features a great room with a wall of windows and incredible views, wood beam ceiling & custom wood fireplace! Beautifully modern kitchen and baths! Lots of natural light! Second living room makes a great office, den or hobby room. Large deck off the living spaces to relax and unwind or entertain and enjoy family & friends! Huge backyard features an open patio, grass, trees & shrubs, room to expand outdoor living space and storage shed. Conveniently located close to shopping, restaurants, parks and downtown!

Learn More!

Contact us today to help you buy or sell your next home in Albuquerque. Looking for the perfect home for sale in Albuquerque? Our easy-to-use home search tool can help you start the process. Join us twice a week on our blog for more real estate advice and great reasons to buy a home in Albuquerque and the surrounding area. Follow us on Facebook for the latest Albuquerque real estate updates.

Get your Morning Inspiration with the Sandi Pressley Team

Thinking about buying a house in Albuquerque? Whatever your reason for moving, there are a few things you should consider before you make the leap. To make your transition as smooth as possible, here are four tips.

Pack early

A move to a new location is never easy, especially when you have to pack up everything you own. However, you can simplify the process by doing a few things. Packing early is one of the most important things you can do. By packing in advance, you can reduce the stress of last-minute packing. 

Furthermore, you can sort through your belongings to determine what you need and can live without. The pack-up process will be much easier for you since you'll be able to take your time and arrange everything as you see fit. 

Label Boxes Clearly

After a long day of driving, arriving at your new home only to realize that you cannot find your toothbrush is frustrating. It's always a hassle to move, but labeling your boxes correctly can make it a lot easier. First and foremost, label each box with its contents clearly. 

Identifying the boxes containing the items you need will save you time when unpacking. In addition, try to group similar items so you can unpack each room in one go. For example, all your kitchen items can go in one box, while all your bathroom items can go in another. You can make your move a breeze by taking the time to label your boxes correctly.

Pack Smart

In order to make a move as easy as possible, packing boxes correctly is essential. Pack heavier items on the bottom of boxes and lighter items on top, as this will prevent the boxes from tipping over and make them easier to handle. 

In addition, it will help to prevent items from shifting during transport and breaking. So, when packing for your next move, put the heavy stuff on the bottom and the light things on top. Your back will thank you later.

Use Bubble Wrap and Packing Peanuts

It is important to protect fragile items during transit if you are moving them. Bubble wrap and packing peanuts can be used to accomplish this. Your items will be cushioned and protected from breaking during the move with the help of these materials. 

So, if you have any delicate items you're worried about, pack them up with bubble wrap and packing peanuts, which will give you peace of mind knowing that they're well protected.

These simple tips can help to make moving a bit easier, even if it is a stressful experience. Start packing early, label your boxes correctly, and pack smart to reduce the hassle of moving. So if you're preparing for a move, keep these tips in mind. They just might make your transition a little bit easier.

HOT ALBUQUERQUE PROPERTY OF THE WEEK!

8709 LA SALA DEL CENTRO NE, Albuquerque, NM 87111

North Valley Gem! Look no further for a PRISTINE custom home in theheart of the North Valley. The spetacular kitchen offers granitecountertops, large pantry and beautiful cabinets. This stunning customhome has no carpet, NO HOA, RV access and a spectacular oversizedthree car garage. The roof, stucco and water heater were all replacedJuly 2020. Large lot with TWO gas/log fireplaces. Close to ALL theamazing amenities the North Valley has to offer. Bring your buyerstoday!

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510 Loma Linda Court NERio Rancho, NM 87124

Contact us today to help you buy or sell your next home in Albuquerque. Looking for the perfect home for sale in Albuquerque? Our easy-to-use home search tool can help you start the process. Join us twice a week on our blog for more real estate advice and great reasons to buy a home in Albuquerque and the surrounding area. Follow us on Facebook for the latest Albuquerque real estate updates.

Get your Morning Inspiration with the Sandi Pressley Team

If it's extra room you're looking for in an Albuquerque home, then you have to take a look at these two amazing homes for sale in Albuquerque. Each offer over 3000 sq feet of spacious luxury. With 4 beds and 3 baths, your family won't be in each other's way as you go about your day.

Contact the Sandi Pressley Team today for your exclusive showing. You can also check out all of our listings on our Featured Listings page.

8709 LA SALA DEL CENTRO NE, Albuquerque, NM 87111

North Valley Gem! Look no further for a PRISTINE custom home in theheart of the North Valley. The spetacular kitchen offers granitecountertops, large pantry and beautiful cabinets. This stunning customhome has no carpet, NO HOA, RV access and a spectacular oversizedthree car garage. The roof, stucco and water heater were all replacedJuly 2020. Large lot with TWO gas/log fireplaces. Close to ALL theamazing amenities the North Valley has to offer. Bring your buyerstoday!

Learn More!

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421 MULLEN Road NW, Los Ranchos, NM 87107

North Valley Gem! Look no further for a PRISTINE custom home in theheart of the North Valley. The spetacular kitchen offers granite countertops, large pantry and beautiful cabinets. This stunning custom home has no carpet, NO HOA, RV access and a spectacular oversized three car garage. The roof, stucco and water heater were all replacedJuly 2020. Large lot with TWO gas/log fireplaces. Close to ALL the amazing amenities the North Valley has to offer. Bring your buyers today!

Learn More!

Contact us today to help you buy or sell your next home in Albuquerque. Looking for the perfect home for sale in Albuquerque? Our easy-to-use home search tool can help you start the process. Join us twice a week on our blog for more real estate advice and great reasons to buy a home in Albuquerque and the surrounding area. Follow us on Facebook for the latest Albuquerque real estate updates.

Do you know how much your Albuquerque home is worth? It will probably be about the same price as other homes in your neighborhood that have sold recently and are similar to your home.

These homes and their values are known as "comps", or comparable sales. Knowing the value of comps in your area in Albuquerque will give you the best idea of the current estimated value of your home.

Knowing how much homes similar to yours, called comparable sales (or in real estate lingo, comps), sold for gives you the best idea of the current estimated value of your home. The trick is finding sales that closely match yours.

What makes a good comparable sale?

The ideal comparable sale is a home that is almost the same as your house int he same subdivision. But that kind of scenario isn't as common. Here are other factors to consider:

Location:

The closer to your house the better, but don’t just use any comparable sale within a mile radius. A good comparable sale is a house in your neighborhood, your subdivision, on the same type of street as your house, and in your school district.

Home type:

Try to find comparable sales that are like your home in style, construction material, square footage, number of bedrooms and baths, basement (having one and whether it’s finished), finishes, and yard size.

Amenities and upgrades:

How many upgrades does the comp have? Does it have the same amenities as your home, such as AC, a deck, or a pool? Does the community it's in have similar amenities?

Date of sale:

Home values fluctuate, so you can't use a value from a year ago. In fact, most lenders say that comparable sales can be no older than 90 days.

Agents can help adjust price based on insider knowledge

Of course, it's very difficult to find an exact clone of your home and neighborhood in most cases. That's where the expert advice of your agent comes in. An experienced real estate agent will examine the differences between your home and comps to adjust the value to match your specific home.

Your agent has certainly been in a lot of homes in your neighborhood, so they know all sorts of details about the comps in the area. They read the comments from other agents in the MLS (multiple listing service) and have heard what other realtors, lenders, closing agents, and appraisers said about the comparable sale. You can rely on the experience of Sandi Pressley and her team to get the most accurate estimate of your Albuquerque home possible.

More ways to pick a home listing price

If you’re still having trouble picking out a listing price for your home, look at the current competition. Ask your real estate agent to be honest about your home and the other homes on the market.

Next, put your comparable sales into two piles: more expensive and less expensive. What makes your home more valuable than the cheaper comparable sales and less valuable than the pricier comparable sales?

HOT ALBUQUERQUE PROPERTY OF THE WEEK!

2220 EDNA Avenue NW, Albuquerque, NM 87104

Beautiful North Valley location in the historic old town area. Lot is ready to build on. Water meter is purchased, city water and sewer are hooked up, electric and gas are in the street. Seller has even paid for the curb cut. Seller has spent over $15,000 on improvements to the lot to make it build ready. Enjoy the charm and convenience of the North Valley with close proximity to Old town and sawmill district.

Learn More!

Contact us today to help you buy or sell your next home in Albuquerque. Looking for the perfect home for sale in Albuquerque? Our easy-to-use home search tool can help you start the process. Join us twice a week on our blog for more real estate advice and great reasons to buy a home in Albuquerque and the surrounding area. Follow us on Facebook for the latest Albuquerque real estate updates.

Get your Morning Inspiration with the Sandi Pressley Team

Do you enjoy removing wallpaper? Of course not! It's a task that never reaches the top 10 "fun things to do" list for most people.

But if you're planning to sell your home in Albuquerque, then removing old wallpaper really is a must. So how do you remove it without removing your sanity as well?

Check to See If Your Walls Were Primed

Hopefully your walls were primed when the wallpaper was applied. This will certainly speed up removal.

This was a more common practice in the 1990s, as it kept the glue from forming too strong of a bond with the plaster.

It's easy enough to check if your walls are primed. Just loosen a corner or seam with a putty knife and pull. If it comes off in one sheet, success!

With well-primed walls, dry stripping should work for the entire job and you could finish a room in a couple of hours at most.

Water Works Miracles

Wallpaper glue is water-based, so you can still remove it if your walls are not primed.

It's a technique the pros use, it works so well.

Here’s what to do with water:

• Score or perforate the paper and its backing in sections so water can soak through and loosen the glue. The pros recommend a scoring tool called the PaperTiger (under $20) because it doesn’t harm the wall.
• Douse the perforated paper with hot water using a pump or compression sprayer. The big mistake most people make is using a regular old spray bottle or damp rag to wet the paper. This leads to hours of fruitless scraping because the paper and its backing don’t get sufficiently saturated. The sprayer, on the other hand, gives you the firepower to really soak the glue.
• Let the paper soak for about 15 minutes and scrape it off with a putty knife.

This process will take about 6 hours for an average room, but it's better than how long it would take if you didn't know how to do this.

Avoid Chemical Strippers Because of the Fumes

Pros will use chemical strippers, as they work even faster than water. But the downside is the fumes, and it costs more than using water (of course).

Don't Try the Fabric Softener Trick

There's a rumor going around that fabric softeners, diluted with water, is a great way to remove wallpaper. Yet, no expert agrees with that method.

In fact, fabric softener makes removing wallpaper even more complicated and messier than just using water, as it ends up mixing the glue with the fabric softener. The fabric softener can also harm drywall. 

So when it comes to removing wallpaper, the happiest journey (assuming your walls aren’t primed) involves water — and patience.

HOT ALBUQUERQUE PROPERTY OF THE WEEK!

2220 EDNA Avenue NW, Albuquerque, NM 87104

Beautiful North Valley location in the historic old town area. Lot is ready to build on. Water meter is purchased, city water and sewer are hooked up, electric and gas are in the street. Seller has even paid for the curb cut. Seller has spent over $15,000 on improvements to the lot to make it build ready. Enjoy the charm and convenience of the North Valley with close proximity to Old town and sawmill district.

Learn More!

Contact us today to help you buy or sell your next home in Albuquerque. Looking for the perfect home for sale in Albuquerque? Our easy-to-use home search tool can help you start the process. Join us twice a week on our blog for more real estate advice and great reasons to buy a home in Albuquerque and the surrounding area. Follow us on Facebook for the latest Albuquerque real estate updates.

Get your Morning Inspiration with the Sandi Pressley Team

Are you looking for a great home Albuquerque that's ready to go now, or are you wanting to build your own dream home? Our latest HOT properties are just waht you're looking for.

Contact the Sandi Pressley Team today for your exclusive showing. You can also check out all of our listings on our Featured Listings page.

Smart Efficient Designed for the future. BuildGreenNM Bronze! Owned Solar panels ensure $8/mo PNM bills AND this home banks electricity every month thx to high function high producing panels. Perfect for your new Tesla! Smart thermostats & drip systems. Environmentally sustainable Synlawn in front & back for yr-round lawns no mowing or watering. Wired for security cameras & speakers in and out. Ring doorbell & alarm. Xtra storage upstairs and down. Big functional kitchen with granite counters Eat-in kitchen island with breakfast bar & raised-panel wood cabinets <1 yr old microwave, dishwasher & stove. Gray-toned wood laminate floors, 18'' tile, carpet only in bedrooms. BIG spares & walk-in closets in every bedroom. Crows Nest Loft with beautiful mtn views. Custom ceiling fans throughout!

Learn More!

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2220 EDNA Avenue NW, Albuquerque, NM 87104

Beautiful North Valley location in the historic old town area. Lot is ready to build on. Water meter is purchased, city water and sewer are hooked up, electric and gas are in the street. Seller has even paid for the curb cut. Seller has spent over $15,000 on improvements to the lot to make it build ready. Enjoy the charm and convenience of the North Valley with close proximity to Old town and sawmill district.

Learn More!

Contact us today to help you buy or sell your next home in Albuquerque. Looking for the perfect home for sale in Albuquerque? Our easy-to-use home search tool can help you start the process. Join us twice a week on our blog for more real estate advice and great reasons to buy a home in Albuquerque and the surrounding area. Follow us on Facebook for the latest Albuquerque real estate updates.

Are you ready to buy your first home in Albuquerque? If so, it can be an exciting time.  But times change, and some of the things that were true in the past about home buying are not true anymore.  There are also a number of misconceptions circulating that can confuse a home buyer, whether it’s your first home or your fifth.

What are some of the misconceptions of buying a home?

1. You need a 20% down payment to get a mortgage.

Many home buyers think you still need at least 20% down to get approved.  Yes that may have been true a few decades ago.  In fact, at one time only people with perfect credit and 20% - 50% down could buy a home.  That’s why the government created the Federal Housing Administration and offered “FHA Loans”. These days, the FHA will back a loan from a home buyer with a credit score as little as 500 and a 10% down payment. If your credit score is higher than 580, you only need 3.5% for a down payment! Certainly it’s easier to afford buying a house than it used to be.

2. You can save money by not using a real estate agent.

You simply can’t afford to not use an agent.  Yes they get a 3% commission.  But you’re not the one that pays that fee as a home buyer.  Instead it’s the seller who pays that fee and it’s part of the selling price. Don’t think you’re getting a discount by not using an agent, as they can help you get a lower price. They will also take care of all the paperwork, appraisals, inspections, and other matters that are part of the process. You need their expertise to guide you through this difficult transaction.

3. It’s cheaper to buy a home that needs a lot of renovating.

Sure we’ve all seen the TV shows where people buy an ugly home and turn it into their dream home. And sure they make it seem so easy.  But in the end, all of these repairs take time and money.  And usually the case is that people end up getting tired of all the renovations and don’t end up loving their new home. So if you need to tear down the walls to make a home look good, then perhaps you should find a better choice.

If you’re ready to buy your first home in Albuquerque, let us help you make it a reality.  We’re happy to answer any questions about the process and make sure you have the right information going into the home buying process. You can also search for your dream home now using our convenient home search tool. And make sure to follow us on Facebook for the latest real estate updates for Albuquerque and the surrounding areas.

HOT ALBUQUERQUE PROPERTY OF THE WEEK!

1011 Puebla Drive, Bernalillo, NM 87004

Immaculate one-story home in the much desired Santiago Subdivision. The natural sunlight from the skylights throughout makes this home bright and open, perfect for entertaining! This home is also handicap accessible with a 36'' wide door frames and 43'' hallway, entrance from the garage into the home with no steps for easy access. Spacious MB and bath featuring double sinks, garden tub, and separate shower with bench. Upgrades to include: Rain gutters, NEW Water Heater (2021), NEW REF A/C Unit (2021), NEW CARPET w/ plush padding (2021), NEW laundry room cabinets, and folding area, (CA Closets). Outside has a covered patio w/ a serene private setting, easy maintenance yard with turf, native plants, and 55 gallon vertical water barrel, and water feature.

Learn More!

Contact us today to help you buy or sell your next home in Albuquerque. Looking for the perfect home for sale in Albuquerque? Our easy-to-use home search tool can help you start the process. Join us twice a week on our blog for more real estate advice and great reasons to buy a home in Albuquerque and the surrounding area. Follow us on Facebook for the latest Albuquerque real estate updates.

Get your Morning Inspiration with the Sandi Pressley Team

Are you thinking about buying a vacation or investment home in Albuquerque? What's the difference between the two, and why does it matter?

There are a few differences in mortgage rules for a second home in Albuquerque as compared to your primary home. You should also know the key differences between buying a second home and an investment property, since these terms are often used interchangeably.

What Does "Second Home" Mean?

In addition to your primary residence, a second home is a property that you live in part of the year. A second home is usually a vacation home, but it can also be a place you go for work. Maybe you have a condo in a city where you often work, but it's not your main residence.

Getting a mortgage for a second home usually requires it to either be in a vacation or resort location, or to be at a certain distance from your primary residence.

Loans for second homes usually have lower interest rates than loans for investment properties.

There is also likely to be a Second Home Rider attached to your loan.

Under the rider, you are obligated to occupy and use the property as your second home. There cannot be any agreements requiring you to rent the property or give a management company or third-party control over its use, or the property cannot be part of a rental pool or timeshare.

It is important to note that while this is the general definition a lender might use, every lender will have their own requirements.

For instance, some lenders won't give you a second home loan if you plan to rent out your home. There are others who will give you a loan as long as you are planning to live in the home for a certain number of days every year, even if the house is also going to be rented.

What About Financing An Investment Property?

The financing process for a second home differs from that of an investment property, so understanding the differences is important. A second home is typically easier to finance than an investment property.

Most second home mortgages have rates that are comparable to those for buying a primary home, and credit requirements are similar as well.

Investment property mortgages are harder to qualify for, and the interest rate and origination fees are likely to be higher.

It doesn't mean investment property mortgages aren't beneficial.

You might be able to get a loan more easily if you own an investment property because the property will generate cash flow to cover your loan and other expenses.

What About the IRS?

As far as comparing a second home with an investment property, the IRS has its own guidelines. You can use a property as a second home if you use it at least 14 days each year, or 10% of the time you rent it. It's an investment property if you don't meet that standard.

The question is, why is it important?

Mortgage interest can be deducted from your tax return if you own a second home. Up to $750,000 in qualifying residential debt can be used to offset interest paid.

In the case of an investment property, you can take the same deduction, but you can deduct interest on the mortgage as a rental income expense.

If you own an investment property, you can claim a depreciation expense, which will reduce the amount of your rental income that is taxable. Regardless of how the IRS classifies the home, if you use it and rent it, you have to divide expenses according to when you use it.

Lastly, if you're considering fudging the truth, don't do it. If you aren't honest about your intended use of the property, then it can be considered mortgage fraud, which is illegal.

HOT ALBUQUERQUE PROPERTY OF THE WEEK!

This gorgeous Roger Smith built home is located in a very private quiet compound in desirable Sandia Heights! Lots of natural light and windows to enjoy the peaceful scenery. This 1800 sf 3 bedroom 2 bath home features a mid century modern vibe with soft clean lines that are timeless in nature, raised T & G wood ceiling, remodeled kitchen and baths, beautiful wood floors in all bedrooms. Private owners suite with spa like bath and access to the inviting backyard. Please see all updates/improvements in documents to many to list. Artistically landscaped yard with mature trees, flowers and plants. Close to Sandia Tram, walking and hiking trails. Home has been meticulously maintained with enormous pride of ownership.

Learn More!

Contact us today to help you buy or sell your next home in Albuquerque. Looking for the perfect home for sale in Albuquerque? Our easy-to-use home search tool can help you start the process. Join us twice a week on our blog for more real estate advice and great reasons to buy a home in Albuquerque and the surrounding area. Follow us on Facebook for the latest Albuquerque real estate updates.

Get your Morning Inspiration with the Sandi Pressley Team