Second home Mortgage informationZweitwohnung Mortgage information
Key for the purchase of 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 are the stages to take to make the purchase of a second home a seamless one. - The best way to begin the second home enquiry is to find a realtor who is acquainted with the required area.
He or she could give you information about neighbourhoods, house rates and the advantages and disadvantages of certain real estate types. Looking at the long-term value of a real estate, the broker could inform you about the development of real estate values and similar disposals, as well as the chances of reselling it. - Consideration of extra cost.
Today's second home buyer is more interested in enjoy their real estate than in achieving 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 a manager who will inspect the place for leakage, ice pipe and other issues during your stay.
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 sharply in some countries.
- Make sure you can buy two mortgage loans. They need to be qualifying 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 use your home as a real second home, you could receive a mortgage interest and real estate duty discount, just like your first residence mortgage. Note that under the new Internal Revenue Service Act, the upper limit for the deductibility 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.