Buying a Second Home in Westport

Buying a Second Home in Westport

  • Cindy Raney & Team
  • 01/4/24

Home to three public beaches, the Saugatuck River, a bevy of cultural attractions, and unique shopping opportunities, Westport has much to offer residents and visitors. Tourists flock to the town each year to explore the picturesque downtown, enjoy theater at the Westport Country Playhouse, live music at the Levitt Pavilion, and observe wildlife in the natural habitat of Earthplace.

Homes in Westport range from traditional colonials and modern single-family homes and luxurious condos to grand waterfront estates. With so many opportunities in this small coastal town, it comes as no surprise that it's a top vacation destination. If you're planning to purchase a second home in Westport, there are many things to consider. This guide can help you prepare for obtaining a second mortgage and making the most of your investment.

Renting your Westport home

A second home is a purchase that can enhance your lifestyle and provide opportunities to take advantage of different climates and surroundings for extended periods. If you vacation frequently in Westport and are seeking a way to spend more time there, purchasing a second home may be the right choice. Still, ownership of a property that isn't your primary residence requires a clear plan of how you'll use the house and maintain it in your absence.

In most cases, a second home is intended as a vacation or investment property. Often, property owners use them for both. A vacation home is a dwelling you use as your residence for part of the year. However, if you rent your vacation home for more than 14 days during the year, the IRS considers it a rental property.

Deciding whether to use your second property as a rental is a personal choice. Renting out your home when you're not using it could offer a valuable income stream. The average price of a yearly rental in Westport is $7,000 with the most expensive renting at $35,000 and least expensive $1,550. Hiring a property manager may be necessary if you decide to rent your home and plan to be out of town frequently.

Getting a second mortgage

Buying a second home is a lot like purchasing a primary residence. However, there are certain distinctions to consider before taking the leap. Lenders consider a second home a higher-risk purchase than a primary residence. To mitigate the risk, borrowers can expect requirements for larger down payments, higher credit scores, and lower debt-to-income ratios (DTIs). Additionally, many government loans are reserved for primary residences, so you must consider the other loan types you're eligible for.

Requirements for a second mortgage commonly include:

  • A credit score of 640 or higher
  • A DTI of up to 45%
  • A down payment of 10–35% (depending on your credit score and other qualifications)
  • At least two months of cash reserves
Even if you're comfortable with the mortgage requirements, other expenses must be considered. For instance, interest may be higher on a second mortgage, and home insurance costs can vary from state to state. The tax implications of your new property may also be challenging to understand. Every state has different tax laws and regulations. If you rent your new place to tenants, you must report your income. However, you may also be eligible for certain tax deductions.

Finding what you need in a Westport home

Your criteria for a second home may be substantially different than those for your primary residence. You may desire less square footage in a vacation home and be more interested in your proximity to dining, shopping and the water.

The most popular neighborhoods in Westport for buying a second home include:

  • Compo Beach: Here, vacationers can make the most of residing on Westport's top-rated beach. Waterfront real estate in this neighborhood offers easy access to the beach, various outdoor activities, and Longshore Club Park.

  • Compo Commons: Best known for its proximity to the Saugatuck River, Compo Commons is a community of spacious homes in a serene environment. The location also provides easy access to downtown and The Levitt Pavilion.

  • Greens Farms: Those seeking a tranquil experience will enjoy this neighborhood's  charm  and estate-like setting with close proximity to Burying Hill Beach and Greens Farms train station.

  • Westport Center: The vibrant town area contains an array of upscale shops and restaurants, cultural attractions, and waterfront real estate along the Saugatuck River. The bustling town is an excellent location for annual events and local activities.

Partner with Cindy Raney to find your second home in Westport

Located just over an hour from New York City and with various exciting entertainment options, Westport is ideal for purchasing a second home. If you're considering buying a home in Westport, Cindy Raney is the perfect partner to help you navigate the process. With an unparalleled commitment to enhancing the client experience, she is highly knowledgeable about the nuances of local neighborhoods and Westport homes for sale. Get in touch to learn how Cindy can help you make a sound investment in an investment property or vacation home in Fairfield County.

*Header photo courtesy of Shutterstock

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Cindy Raney & Team is the elite, boutique real estate team in Fairfield County. They are extremely well versed in the industry, having sold over half a billion dollars in luxury real estate. Cindy’s team is particularly focused on the client experience, helping them throughout the home buying or selling process to ensure that their experience with the team is exceptional.

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