Purchasing a Second Home

Whether you want a contemporary urban dwelling, a luxurious Latin villa, or just a comfortable cottage away from all the commotion, don't forget to take into account the responsibilities of an additional property.

Financing a second home can be tricky because lenders will typically assign a greater level of risk to your mortgage loan. In turn, you'll need to provide a larger down payment and incur a higher rate of interest than you did for your primary residence. To help alleviate the costs, you can use a home equity loan because they generally have a lower interest rate than standard mortgages.
Taxes with a second home can be confusing, especially if you are renting out your property during the year. According to the National Association of Tax Professionals®, if you rent your home for 15 days or less, you are not required to report your earnings. However, if it's rented out for more than 15 days, you're required to file it as additional income. Remember you may be able to deduct the cost of repairs and maintenance that you put into your home.

The location of your second home should depend on you and your family's individual needs and wants. Don't just examine the property. Look around the neighborhood and take into account the people, shopping, proximity and attractions. If you have small children, make sure the neighborhood is kid-friendly. Secluded lake houses are great, but remember you don't want the seclusion to lead to inconvenience and added gas expenses. Also, consider whether or not you'll be renting out your home. If you choose to do so, make sure you pick a destination of interest to a wide variety of renters.

For more information on purchasing a second home and all that comes with it, contact me today!