What You Need to Know About Purchasing a Second Home
Have you ever dreamed of owning a vacation home? A home mortgage loan from a credit union can make that dream a reality. However, there are several important factors you’ll need to consider. The location of the second home is a crucial factor. Make sure that you enjoy the destination enough that it makes sense to buy a second home there. And since it isn’t your primary residence, you’ll need to find a real estate agent who is familiar with the neighborhoods in the area.
Mortgages for Second Homes
Qualifying for a mortgage for a second home can be tricky if you’re still paying off your first home. You might consider talking to the credit union about refinancing your first house in order to take advantage of lower interest rates or a lower monthly payment. The money you’ll save can help you qualify for a second mortgage. Be sure to factor in closing costs and private mortgage insurance (PMI) in your budget.
Additional Costs of Maintaining a Second Home
Since you’re already a homeowner, you’re familiar with the typical costs of maintaining a house. You’ll need to factor in utilities, maintenance, and repairs. Be aware that the cost to maintain a second home is typically higher than the maintenance expenses for a first home. Since it isn’t your primary residence, you’ll need to pay a property maintenance service to check on the home while you’re away.
Tax Implications of Owning a Second Home
You might want to rent out your second home when you aren’t using it. This can help offset the additional costs of maintenance, not to mention pay off that second home mortgage loan. However, it’s a good idea to talk to a tax advisor before you turn your second home into a profitable business. You’ll need to pay taxes on the rental income.
If you’re thinking about buying a vacation home, you can get the personalized financial guidance you need at GCS Credit Union in O’Fallon. Meet with our financial planner to discuss your financial situation and find out how much home you can afford. We offer highly competitive home mortgage loans with flexible, customizable terms. Call (618) 797-7993.