When you buy a second home, you're investing in a piece of real estate that you're going to use, enjoy, and maybe even pass down to your children one day. However, this type of purchase is also a major commitment that shouldn’t be taken lightly. It’s true that all homeowners who are searching for an additional home already know what the home-buying process is like. Unfortunately, many people don't realize that purchasing a second home is a completely different process. When deciding whether or not to take the plunge, first consider a few things you should avoid.
1. Don’t Ignore the Cost of Maintaining 2 Homes
Consider all the expenses of maintaining your current home. Aside from your mortgage, there is plenty of indoor and outdoor maintenance to consider. As a homeowner, you never know when you might need to invest in an expensive repair. Can you afford multiple costly repairs if they were to occur simultaneously? With a second home, every expense will be doubled. This is why it’s incredibly important to know exactly what you can afford. Don’t just make estimates; sit down and run the numbers, then do it once more to ensure you haven’t missed any possible expenses.
2. Don’t Choose the Wrong Lender
Buying a second home shouldn’t be a stressful process. With that being said, it can be if you choose the wrong mortgage lender. An inexperienced or impersonal big-box lender won’t be able to give you the support you deserve. Even if you have a low credit score or you’re facing other challenges, a lender should be able to provide you with thoughtful solutions. At Clearview Realty, we have over 25 years of expertise to utilize. We understand that purchasing a second home can be complicated, and there are many factors to consider. However, we’re committed to simplifying the process and working with you to find the right outcome.
3. Don’t Forget the IRS
Before purchasing a second home, it’s important to know how you intend to use it. Are you looking to buy a rental property? Renting out your home leads to different tax implications. You’ll be able to deduct business expenses, but you’ll also need to report income. If you want to classify your second home as a personal residence, you can only rent it out for 14 days or less every year. Ideally, you should speak to a tax professional prior to purchasing a second home. You don’t want any unwanted surprises later; it’s always best to be prepared.
How Clearview Realty Can Help with Second Home Purchases
Clearview Realty helps home buyers in Colorado, Florida, California, and Ohio understand the different types of mortgages that are available and provides loans to help people achieve the dream of homeownership. Since the specifics of which mortgage to choose is dependent on a variety of factors, we encourage you to call us for more information and find out which is right for you. Need more information about what to do before buying a second home? Call us! Our number is (720) 217-5731, or you can send us a message.