A second home is defined as a one-unit property that’s located within a reasonable distance from your primary residence. It can be a vacation home that you occupy for some portion of the year or by someone you allow to occupy it. However, to be a second home, it must not be rented or be part of a timeshare arrangement.
- Rental opportunity. If your home is in a popular vacation spot, you may be able to rent it and earn additional income when you’re not using it.
- Ongoing income and cash flow. If you choose to rent your vacation home, it could provide ongoing income to offset your expenses, and may provide tax benefits in the form of depreciation expense. Restrictions apply. (Consult your tax advisor regarding the deductibility of depreciation expense.)
- Potential tax benefits. Mortgage and home equity interest payments and property taxes may offer the opportunity for tax advantages. (Consult your tax advisor regarding the deductibility of interest.)
- Potential property appreciation. A vacation home may be a good long-term asset to hold as homes can increase in value.
Getting prequalified is the initial step in the mortgage process, and it’s generally fairly simple. We will help you take the first step toward your home financing goal with a pre-qualification consultation. Call us today or simply prequalify online. Our free Mortgage Pre-Qualification Form is also available to download.