Now the problem for many with too much debt on their plate is how to deal with the mortgage on a second home.
Just two years ago, 12 percent of all residential sales were vacation homes and 21 percent of transactions were for investment properties, according to the National Association of Realtors.
When buyers purchase a home that's not their primary residence and ask lenders to qualify them based on expected rental receipts, it's counted as an investment property. If, though, borrowers plan to pay the mortgage out of their own pocket and use the property for their own enjoyment, it's a vacation home.
Government-sponsored foreclosure rescue programs are aimed at saving primary homes. Indeed it's those who are in danger of losing the one and only roof over their heads who are in the direst need.
However, there is some dispute about whether or not the recently announced government effort allows owners of bona fide vacation homes and some types of rental units to seek a refinance.
Here is a look at strategies which may help owners strapped with a double dose of housing debt.
Refinancing
In this period of ultralow mortgage rates, all homeowners should examine the possible benefits of refinancing, says Doug Rice, a Castro Valley, Calif., investment advisor.
But even if a refinance shaves several hundred dollars off the monthly mortgage, the expense of a second home simply isn't affordable for owners who've seen their income drop, says Milo Benningfield, a San Francisco financial adviser. Instead of pursuing a refinance, they may be better served by trying to sell first, even if it means trying to arrange a short sale (see below).
