Some lenders require a minimum score of 680 to receive approval, but many lenders require a score between 725 and 750 to qualify for a second home loan. To qualify as a second home, the property must also be far enough away. Lenders will generally only consider a property as a second home if it is at least 50 miles from your primary residence. This may seem strange, but why would your second home, a home that you would consider a vacation home, be located closer to where you already live? To qualify for a conventional second home loan, you'll typically have to meet the highest credit rating standards of 725 or even 750, depending on the lender.
Your monthly debt-to-income ratio should be strong, especially if you're trying to limit your down payment to 20%. All borrowers must document all their income and assets to obtain a loan for a second home, since lenders must have significant cash reserves to ensure that they have the necessary resources to manage payments for two homes. Mortgages for real estate investments usually require a down payment of at least 20% because it is very difficult to obtain mortgage insurance for these purchases.
