Cape Coral Second Homes

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Cape Coral Single Family Homes make great second homes to retire in.

The market in Cape Coral for second homes is regaining a stronger interest as many baby boomers have been seeing the great prices available for second homes and investment homes in the Cape Coral area. Our home prices are still very affordable with many single family homes that can be used as second homes or investment properties are priced well below the median range for most other states. Many people are now looking at second homes in Cape Coral as an option as buying now makes sense with the mortgage rates at historic rates and the ability to buy now and retire later, while in the meantime being able to rent out the homes seasonally.

A large majority of people that are looking at Cape Coral homes as second home investments are foreign buyers especially from Canada and all over Europe. Many of the overseas buyers are using cash to buy second homes in the Cape Coral area. The most common concern from buyers in terms of buying a second home is what will it cost to buy a home beyond the actual home price listed in the MLS. This cost of ownership depends mostly on how you plan on purchasing the loan, whether it is being bought for cash or getting a mortgage. If you are paying cash for a second home than the only expenses you would have ongoing is yearly taxes and any monthly maintenance costs such as electric and other utilities, lawn maintenance, etc. Also something to consider if paying cash is the goal is that you don’t have other investment opportunities that may yield higher interest rates and get you a better rate of return on your investment.

If you are going to get a mortgage loan to finance part of the second home purchase I recommend using a mortgage banker you know and trust to figure out which loan program is is most suitable for you. If you are planning on using the house as a second home for a shorter period of time say 5 years or less you might want to check into getting an ARM (Adjustable Rate Mortgage) that can be locked in for the first 5 years which could help you get an even lower interest rate than a 30 year mortgage. For most second homes you should be prepared to put down 20-25% down. For Foreign Nationals buying a second home in the United States the down payments will around 30-40% in most cases. Many buyers get a line of credit from the country that they live in for most of the year for lower rates and borrowing fees.

So to see if it is the right time for you to buy a second home in Cape Coral or Fort Myers Florida let’s do some math using a property found in the MLS. The current asking price is $200,000. We will say that the mortgage lender requires 25% down payment. So you will be putting a down payment of $50,000. Next is the closing costs.

First I looked up the tax estimator on the Lee County Property Appraisers website at www.leepa.org and the estimated yearly taxes are: $ 3826. The next cost which is a one time cost is the closing costs including loan fees. An estimated breakdown:

Closing costs: $4500
Insurance Policies and prepaid property taxes $5800
Estimated Cost to Close: $ $60,300

Monthly mortgage payment based on a $150,000 loan at 5%
$805.23 plus monthly escrows for taxes and insurance= $1331.56 monthly payment

So when the home is not being occupied you will still have the some small monthly maintenance expenses. I will estimate as if you are not using the home for 6 months out of year so the maintenance will be on the lower end of the scale.

Monthly estimated expenses:
Electricity $110-$130
Water $20-$40
Lawn Maintenance $75

Hopefully this will give you a very good example of what the estimated costs of ownership would be if you were to explore buying a second home in Cape Coral Florida.

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