Second home MortgageMortgage second home
Buying a second home
Now is a good moment to take the plunge if you have thought about purchasing a second home. The mortgage interest rate is still low compared to the previous year. These four stages will help make the purchase of a second home a seamless one. Best way to begin the second home enquiry is to find a realtor who is acquainted with the required area.
Looking at the long-term value of a real estate, the broker could inform you about the development of prices and similar disposals as well as the chances for re-sale. Today's second home buyer is more interested in enjoyment than a fast ROI. However, you should keep in mind that you will be spending a great deal of your freetime outside the home, which is usually associated with extra expenses, such as checking for leakage of fresh air, freezing pipe or other issues by a manager in your office.
Insuring for a second home can be more complicated than for a main home. For example, if you are considering a second home on the shore, you will need to take out flooding cover in conjunction with your normal household contents policy. Underwriting has become more complex in Küstengemeinden and costs have risen rapidly in some market segments.
Concerning mortgage finance, you must be qualified for a second home mortgage that will lie on every mortgage due on your home. When you have a good rapport with the mortgage bank on your main home, this could be a good place to begin your search for a second home mortgage.
When you are considering developing the capital you have accumulated on your main home to cover your second home, remember that if you need it for an emergency, you may not be able to use it. When you use your home as a real second home, you could receive a mortgage interest and real estate tax discount, just like your first home mortgage.
Note that once the new Tax Cuts And Jobs Act comes into force, the upper limit for the withdrawal of mortgage interest will be reduced from $1 million to $750,000. So, if you already have a $750,000 mortgage and get a holiday home mortgage, you won't be able to subtract the interest on the second mortgage.
When renting out your second home, you must take into account extra fiscal effects, especially if the lease term exceeds 14/year.