You may have friends who have done it, and you might be considering doing it yourself. We’re talking about buying a second home. Sometimes this is a wonderful idea, and other times it’s not the best move. Before you dive in and start calling mortgage companies, there are some things to weigh into the decision.

Reasons to Purchase a Second Home

There are different reasons why people want an additional house. You might have a favorite vacation spot and want a home there so you can visit more often. There may be a fixer-upper that you’ve had your eye on and you want to try to flip it. Or, the rental game may be tempting you and you want to invest in a home to rent. All of these are perfectly respectable reasons to invest in a second home.

The Benefits of a Second Home

Owning an additional home offers some benefits to you. First, the tax benefits can be advantageous, since you may get to write off your real estate taxes and the interest on your second home’s mortgage. Second, real estate tends to be a good investment over time. Third, a rental could potentially make your investment pay off greatly. And finally, if it’s a vacation home, you and your family could enjoy it and make precious memories.

The Drawbacks

Some aspects of owning a second home may give you pause in signing that dotted line. For one, it’s another expense. Not just the home price, but the additional taxes, insurance, yard upkeep, and repairs that will inevitably be required. These can add up to a bundle. There’s also the commitment of a mortgage loan. If you needed to sell it, how easy would that be? You also need to look at the big picture. Will you really use the second home? If it’s going to be a rental, are you cut out for being a landlord, and can you easily keep it rented?

Know if the Time is Right for You to Buy a Second Home

If your pros outweigh the cons, a second home may be a good decision for you. Now you need to decide when is a good time for you to purchase it. It’s important to be financially stable. Not only are you taking on a new mortgage loan, but you are also committing to it for potentially many years. Make sure you have a low debt load, secure employment, and healthy “rainy day” savings. Also, look at the area you want to purchase in. Is it extremely hot, with high prices to match? Or can you get a bargain? The latter fits in with your plans nicely.

Buying a second home is a distinctly personal decision, and only you know if it’s the best decision at the right time. Think about what is motivating you to do it, weigh the pros and cons, and carefully consider your finances before you make your move. These steps will maximize the chance that you’re making the best decision for you and your family.

If you’re interested in purchasing a second home, contact us today to discover your mortgage loan options!